Auto Loan Calculator
Work out your real monthly car payment — including sales tax, your down payment and your trade-in — and see exactly what the loan costs you in interest before you sit down at the finance desk.
- Updated Aug 9, 2026
- Reviewed by the BSF CPA Editorial Team
- US auto financing
- 9 min read
Your credit score moves the payment more than any negotiation at the dealership. On a $45,000 car with $6,000 down, 6.5% sales tax and a 60-month term, a super-prime borrower at 4.55% pays $783/month and $5,029 in total interest. A deep-subprime borrower at 16.01% pays $1,020/month and $19,260 in interest — $14,231 more for the identical car.
Enter the vehicle price, your down payment and trade-in, your state sales tax rate, the APR you have been quoted, and the term. Sales tax is calculated on the price less your trade-in and is added to the amount financed.
Auto Loan Calculator
Work out your monthly car payment, the total interest you’ll pay, and the true cost of the vehicle once financing is included.
Enter your details and press Calculate to see your car payment.
How the auto loan calculator works
The calculator first works out how much you actually finance: the vehicle price plus sales tax, minus your down payment and any trade-in. That amount is repaid as a standard amortizing loan, so early payments are mostly interest and later ones mostly principal. Sales tax is applied to the price less your trade-in, which is how most US states treat it.
Sales tax = (Price − Trade-in) × tax rate
Monthly = Financed × r / (1 − (1 + r)^−n), r = rate/12
Total interest is what the loan costs you on top of the amount financed. For a home loan instead, use our Mortgage Payment Calculator; for any general loan, the Loan Payment Calculator.
Tips for a cheaper car loan
The two biggest levers are your interest rate and your loan term. A strong credit score can cut your rate by several points, and choosing a 48-month term over 72 months saves a large amount of interest even though the monthly payment is higher. Beware very long terms: they make the monthly payment look affordable but you can end up owing more than the car is worth.
- Shop the rate, not the payment: dealers may lengthen the term to hit a monthly number while quietly raising total cost.
- Put more down: a bigger down payment reduces interest and the risk of going “underwater” on the loan.
- Get pre-approved: a bank or credit union pre-approval gives you leverage and a rate to beat.
Frequently asked questions
Does a trade-in reduce my sales tax? +
What loan term should I choose? +
How does my credit score affect the rate? +
Should I include taxes and fees? +
Is it better to pay cash or finance? +
How to read your results
| Output | What it means | Why it matters |
|---|---|---|
| Monthly payment | Principal and interest on the financed balance | What dealers negotiate around. Excludes insurance and upkeep. |
| Sales tax | Your rate applied to price less trade-in | Rolled into the loan, so you pay interest on it too. |
| Amount financed | Price − down − trade-in + sales tax | The actual principal. This is what accrues interest. |
| Total interest | Everything paid above the amount financed | The true cost of the financing. |
| Total of payments | Payment × number of months | What leaves your account over the loan’s life. |
| Total cost | Total of payments + down + trade-in | All-in cost, including the equity you handed over. |
What this calculator does
An auto loan is a fully amortizing fixed-rate instalment loan. Every payment is identical, but the split changes: early payments are mostly interest, later ones mostly principal. That is why the first year of an 84-month loan builds almost no equity.
Use it to turn a sticker price into a real monthly commitment, and to separate the effect of the APR from the effect of the term — dealers often quote a lower payment by stretching the term, not cutting the rate.
Registration, title, doc fees, warranties, GAP and dealer add-ons are excluded. They commonly add $500–$2,500 and are usually financed, so add them to the vehicle price. Insurance and maintenance are ownership costs, not loan costs.
The formula
financed = price − down − trade-in + sales tax
i = APR ÷ 12
payment = financed × i × (1 + i)n ÷ [(1 + i)n − 1]
- price Negotiated vehicle price, before tax.
- i Monthly rate — the annual APR divided by 12.
- n Number of monthly payments (36–84 here).
- financed The principal. Sales tax increases it, so you pay interest on the tax.
At 0% the formula reduces to financed ÷ n, which the calculator handles. If your trade-in exceeds the vehicle price, the financed amount floors at zero.
Three worked examples
$45,000 vehicle, $6,000 down, 6.5% tax, 6.23% APR, 60 months
Sales tax of $2,925 pushes the amount financed to $41,925 — more than the $39,000 you might expect, because tax is financed too. Payment $815, total interest $6,976, all-in cost $54,901 on a $45,000 sticker.
6.23% is the Experian Q1 2026 average new-car APR for prime borrowers (661–780).
$26,000 vehicle, $2,000 down, $8,000 trade-in, 7% tax, 14.03% APR, 60 months
The trade-in cuts the taxable base to $18,000, so tax is $1,260 rather than $1,820 — a $560 saving on top of the trade’s $8,000 of value. Payment $402 on $17,260 financed. But total interest is $6,853, nearly 40% of the amount borrowed, on a loan a third the size of Example 1’s.
$40,000 vehicle, $5,000 down, 6% tax, 7.5% APR
| Term | Payment | Total interest | Total of payments |
|---|---|---|---|
| 36 months | $1,163 | $4,481 | $41,881 |
| 48 months | $904 | $6,006 | $43,406 |
| 60 months | $749 | $7,565 | $44,965 |
| 72 months | $647 | $9,159 | $46,559 |
| 84 months | $574 | $10,787 | $48,187 |
Going from 36 to 84 months halves the payment and multiplies interest by 2.4× — an extra $6,306. The relief is real, but you are borrowing it from yourself at 7.5%.
Trade-ins and sales tax: the rule varies by state
This calculator applies the trade-in tax credit — tax on price less trade-in — which is how most states work. On a $40,000 car with a $15,000 trade at 7%, the credit cuts tax from $2,800 to $1,750, saving $1,050 and about $21 a month.
California, Hawaii, Kentucky, Maryland, Virginia and DC tax the full purchase price regardless of trade-in. Michigan allows only a partial credit, capped at $12,000 of trade value for 2026 (the cap rises yearly until removed in 2029).
Workaround: set the trade-in field to $0 and subtract the trade from the vehicle price instead. Tax is then charged on the full price and the financed amount still comes out right. Confirm current rules with your state’s department of revenue.
A consequence worth knowing: in credit states a dealer offer below a private-sale offer can still win — a $15,000 dealer offer that also saves $1,050 in tax is effectively worth $16,050.
2026 rate benchmarks
Your credit tier moves the cost more than anything you negotiate. Below: the same $45,000 car, $6,000 down, 60 months, at each tier’s Experian Q1 2026 average new-car APR.
| Credit tier | Score | APR (new) | APR (used) | Payment | Total interest |
|---|---|---|---|---|---|
| Super-prime | 781–850 | 4.55% | 6.30% | $783 | $5,029 |
| Prime | 661–780 | 6.23% | 8.77% | $815 | $6,976 |
| Nonprime | 601–660 | 9.67% | 14.03% | $884 | $11,114 |
| Subprime | 501–600 | 13.44% | 19.42% | $963 | $15,879 |
| Deep subprime | 300–500 | 16.01% | 21.77% | $1,020 | $19,260 |
Top tier to bottom is $14,231 of interest on one car. Used rates run 2–6 points above new at every tier, so a cheaper used car does not guarantee cheaper financing.
Across all 2026 borrowers, APRs average about 6.4% new and 11.4% used. The average new-car payment is roughly $770/month and the average used-car payment about $531, against average prices near $49,000 and $26,000.
Common mistakes
Negotiating the monthly payment
Name a payment target and a dealer can hit it by stretching the term or trimming your trade allowance. Negotiate price and APR separately; let the payment fall out.
Forgetting tax is financed
Sales tax joins the loan and accrues interest for the whole term. In Example 1, $2,925 of tax carries roughly $487 of interest.
Taking 84 months to afford more car
A long term does not make a car affordable, only the payment small — and it keeps you underwater for years while depreciation outruns principal.
Not shopping the rate
One percentage point on Example 1 costs $1,182 in extra interest. A pre-approval is free and gives you a number the dealer has to beat.
Rolling negative equity forward
Owing more than your trade is worth adds the shortfall to the new loan, starting the next car underwater. This calculator assumes positive equity.
Assuming 0% is the best deal
Promotional 0% usually replaces a cash rebate. Compare the rebate plus outside financing against 0% with no rebate — the rebate often wins.
Best practices
Get pre-approved first
Arrive with a bank or credit union rate. If the dealer beats it, you have saved money without negotiating at all.
Put 20% down on new, 10% on used
On Example 1, moving from $0 to $9,000 down cuts the payment from $932 to $757 and interest from $7,975 to $6,477 — and keeps you above water.
Take the shortest term you can carry
Choose by what you can sustain, not what feels comfortable. Each 12 months removed saves roughly $1,500 on a $35,000 loan at 7.5%.
Cluster your rate shopping
Auto inquiries in a short window are generally scored as one event, so compare lenders across a couple of weeks rather than months.
Frequently asked questions
Does this include taxes and fees?
It includes state and local sales tax, entered as a percentage. It excludes registration, title, doc fees, warranties and add-ons. If those will be financed, add them to the vehicle price first.
Is sales tax charged before or after my trade-in?
After — on price minus trade-in, as most states do. California, Hawaii, Kentucky, Maryland, Virginia and DC tax the full price, and Michigan caps the credit at $12,000 for 2026. In those states, set the trade-in to $0 and subtract it from the price instead.
What is a good auto loan rate in 2026?
It depends on your tier. Q1 2026 averages ran 4.55% (super-prime) to 16.01% (deep subprime) on new cars, and 6.30% to 21.77% on used. At or below your tier’s average is competitive.
Should I take 0% financing or the cash rebate?
Compare them directly: the payment at 0% on the full price, versus the payment on price-minus-rebate at your best outside rate. Shorter terms and larger rebates favour the rebate; long terms at high market rates favour 0%.
How much should I put down?
A common guideline is 20% new, 10% used. The point is not only a lower payment but staying above water — new cars shed a large share of value in year one, and a thin down payment on a long term leaves you underwater for years.
Why does a longer term cost so much more?
Interest accrues monthly on the outstanding balance, so a longer term means more months at a higher balance. In Example 3, 36 to 84 months cuts the payment 51% but raises interest 141%.
What does “underwater” mean?
You owe more than the car is worth. It happens when depreciation outpaces principal repayment — common early in long loans with small down payments. Selling or totalling the car then leaves you owing the gap, which is what GAP insurance covers.
Does it handle 0% APR?
Yes. At 0% the payment is the amount financed divided by the months, and total interest is zero. Set the rate field to 0 to model a promotional offer.
Can I use this for a lease?
No. A lease payment is depreciation plus a rent charge on the capitalized cost, not an amortized loan, and lease sales tax is often charged monthly on the payment rather than up front. Use a lease calculator instead.
Will extra payments save me money?
Yes, provided your lender applies them to principal and charges no prepayment penalty. Because interest accrues on the balance, an extra payment early saves considerably more than the same amount late.
Does total cost include my trade-in?
Yes — total cost is the total of payments plus your down payment plus your trade-in value, because the trade is real value you gave up. It shows the full economic cost of entering the vehicle.
Is APR the same as the interest rate?
For most auto loans, effectively yes, since auto lenders rarely charge origination fees. Where fees exist, the APR is higher than the note rate because it spreads those fees across the payments. Enter the APR you were quoted.
Methodology & sources
Payments use the standard fixed-rate amortization formula with monthly compounding and end-of-month payments. Sales tax is applied to price less trade-in and added to the amount financed. Displayed figures are rounded but totals are computed unrounded, so a total may differ by a dollar or two from the rounded payment times the term.
- Experian, State of the Automotive Finance Market, Q1 2026 — average APR by credit tier, new and used.
- Experian Ask Experian — average car payment and loan amount data, 2026.
- State departments of revenue — motor vehicle sales tax and trade-in credit rules, 2026.
- Michigan Department of Treasury, Form 485 — trade-in credit cap, 2026.
Related resources
- Personal Loan CalculatorUnsecured borrowing, including origination fees
- Mortgage Payment CalculatorThe same maths on a much longer term
- Loan Prepayment CalculatorWhat paying extra actually saves
- Lease vs Buy a CarWhen financing beats leasing
- Net Worth CalculatorHow a depreciating asset hits your balance sheet
- All CalculatorsThe full BSF library
Know the number before you negotiate
Walk in with a payment you have already tested, a rate you have already been quoted, and a term you have already chosen.
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