A car loan payment depends on how much you borrow, the interest rate and how long you take to pay it back. This calculator includes the parts people often forget: sales tax, fees rolled into the loan, your trade-in and anything still owed on it.
How the payment is calculated
Amount financed = price + sales tax + fees − down payment − trade-in value + amount still owed on the trade-in.
The monthly payment uses the standard amortization formula:
payment = P × r ÷ (1 − (1 + r)^−n)
where P is the amount financed, r is the APR ÷ 12 and n is the number of months. Each payment covers that month's interest first; the rest reduces the balance. Early payments are mostly interest, which is why the yearly schedule shows principal growing over time.
How term and rate change the total
A longer term lowers the monthly payment but raises the total interest, and you stay "upside down" (owing more than the car is worth) for longer. A lower APR saves money on every payment.
| To lower your total cost | Why it works |
|---|---|
| Put more down | Less to finance, less interest. |
| Choose a shorter term | Fewer months of interest, usually a lower rate too. |
| Get pre-approved | A bank or credit union quote gives you a rate to compare with the dealer's. |
| Pay sales tax and fees up front | Interest isn't charged on them. |
- Put more down
- Why it works
- Less to finance, less interest.
- Choose a shorter term
- Why it works
- Fewer months of interest, usually a lower rate too.
- Get pre-approved
- Why it works
- A bank or credit union quote gives you a rate to compare with the dealer's.
- Pay sales tax and fees up front
- Why it works
- Interest isn't charged on them.
About sales tax and trade-ins
Many states tax only the price after your trade-in's value is subtracted; some tax the full price. Rebates and dealer fees are also treated differently by state. Use the checkbox to match your state, and confirm with the dealer's buyer's order. Our sister site has a dedicated car sales tax calculator (opens in a new tab).
Frequently asked questions
How is a car payment calculated?
From the amount financed, the APR and the number of months, using the amortization formula above. Our calculator adds tax, fees and trade-in to get the amount financed first.
What's a good loan term for a car?
Shorter terms cost less overall. Many buyers aim for 60 months or less; 72 and 84-month loans keep payments low but add interest and raise the risk of owing more than the car is worth.
Does the payment include insurance?
No. Lenders usually require full coverage while you have a loan, so get an insurance quote too. The cost of ownership calculator puts it all together.
What if I still owe money on my trade-in?
That negative equity is added to the new loan. Enter the amount still owed and the calculator includes it.
Results are estimates from the numbers you enter and, where noted, EPA ratings. Not financial advice. Page updated .