Car Payment Calculator
Calculate your monthly car payment including down payment, trade-in value, and sales tax. This auto loan payment calculator helps you budget for a vehicle purchase by showing total interest and cost of ownership. Compare results with our auto loan calculator or estimate your car financing options with trade-in.
How to Calculate Car Payment
- Determine the vehicle price and subtract your trade-in value to get the taxable amount.
- Calculate sales tax on the taxable amount (price minus trade-in).
- Add sales tax to the vehicle price, then subtract down payment and trade-in to get the loan amount.
- Use the loan amount, monthly interest rate, and term to calculate the monthly payment using the amortization formula.
- Multiply monthly payment by the number of months to find total cost, then subtract loan amount for total interest.
Formula
Loan Amount = Vehicle Price + Sales Tax - Down Payment - Trade-In
Sales Tax = (Vehicle Price - Trade-In) x Tax Rate
Monthly Payment = P x [r(1+r)^n] / [(1+r)^n - 1]
Where:
P = Loan amount
r = Monthly interest rate (annual rate / 12)
n = Number of monthly paymentsExample
You buy a $35,000 car with $5,000 down, $3,000 trade-in, 7% sales tax, at 6.5% interest for 60 months:
Taxable Amount = $35,000 - $3,000 = $32,000
Sales Tax = $32,000 x 0.07 = $2,240
Loan Amount = $35,000 + $2,240 - $5,000 - $3,000 = $29,240
Monthly Rate = 6.5% / 12 = 0.5417%
Monthly Payment = $29,240 x [0.005417(1.005417)^60] / [(1.005417)^60 - 1]
Monthly Payment = $571.52
Total Paid = $571.52 x 60 = $34,291.20
Total Interest = $34,291.20 - $29,240 = $5,051.20Monthly Car Payment Reference Table
| Loan Amount | 36 mo @ 6% | 48 mo @ 6% | 60 mo @ 6% | 72 mo @ 6% |
|---|---|---|---|---|
| $15,000 | $456 | $352 | $290 | $249 |
| $20,000 | $608 | $470 | $387 | $331 |
| $25,000 | $761 | $587 | $483 | $414 |
| $30,000 | $913 | $705 | $580 | $497 |
| $35,000 | $1065 | $822 | $677 | $580 |
| $40,000 | $1217 | $939 | $773 | $663 |
| $45,000 | $1369 | $1057 | $870 | $746 |
| $50,000 | $1521 | $1174 | $967 | $829 |
Frequently Asked Questions
What is a good interest rate for a car loan?
As of 2024, good rates for new cars range from 4% to 7% for borrowers with good credit (700+). Used car rates are typically 1-2% higher. Excellent credit (750+) can qualify for rates below 4%.
Should I choose a longer loan term for lower payments?
Longer terms reduce monthly payments but increase total interest paid significantly. A 72-month loan at 6% costs about 50% more in interest than a 48-month loan. Choose the shortest term you can comfortably afford.
Is sales tax calculated on the full price or after trade-in?
In most US states, sales tax is calculated on the difference between the purchase price and trade-in value. This calculator uses that method. Check your state laws as some states tax the full purchase price.
How much should I put down on a car?
Financial experts recommend at least 20% down on a new car and 10% on a used car. A larger down payment reduces your loan amount, monthly payment, and total interest while helping avoid being underwater on the loan.
Does this include insurance and registration?
This calculator covers the loan payment only. Your total monthly cost of ownership will also include insurance, registration, fuel, and maintenance. Budget an additional $200-$400 per month for these expenses.