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Car Payment Calculator
Your car loan
Sales tax is charged on the price minus your trade-in, then added to the amount you finance. Tax rules vary by state — check your state’s rules before you buy.
Example: $30,000 car, $3,000 down, $2,000 trade-in, 6.5% APR for 60 months and 7.25% sales tax → $528.87 a month, $4,702.38 of interest, $31,732.38 in total.
Behind the numbers
How your car payment is calculated
Start with the amount financed: the vehicle price, minus your down payment and trade-in, plus sales tax on the price after trade-in. Then apply the standard loan amortization formula, which splits every monthly payment into interest and principal. Early payments are mostly interest; the principal share grows as the balance falls.
P is the amount financed ($27,030), r is the monthly rate (6.5% ÷ 12 = 0.5417%) and n is the number of months (60). In the first year of the example, $1,617.72 of the payments is interest and $4,728.75 is principal.
A few comparisons
What changes your payment
Same car and tax as the example ($27,030 financed). Shorter terms cost more per month but far less interest overall, and a lower APR beats a longer term.
| Scenario | Monthly payment | Total interest |
|---|---|---|
| 36 months at 6.5% APR | $828.44 | $2,793.93 |
| 48 months at 6.5% APR | $641.02 | $3,738.73 |
| 60 months at 6.5% APR | $528.87 | $4,702.38 |
| 72 months at 6.5% APR | $454.37 | $5,684.81 |
| 60 months at 4.5% APR | $503.92 | $3,205.25 |
| 60 months at 8.5% APR | $554.56 | $6,243.71 |
Pay less for the same car.
A bigger down payment shrinks the amount financed, which cuts both the monthly payment and the total interest — it is the simplest way to lower the cost of the loan.
Compare APRs from your bank, a credit union and the dealer before you sign. Even one point less on the rate can save over $1,000 on a 60-month loan.
A shorter term costs more each month but far less overall. If the 48-month payment fits your budget, it saves about $964 in interest versus 60 months on the example car.
Budget for more than the payment: insurance, registration and maintenance are part of owning the car, and a longer loan can leave you owing more than the car is worth.
Good to know
Your car payment questions, answered.
How is a car payment calculated?
With the standard amortization formula: monthly payment = amount financed × monthly rate ÷ (1 − (1 + monthly rate)^−months), where the monthly rate is the APR divided by 12. The amount financed is the vehicle price minus your down payment and trade-in, plus sales tax.
Does sales tax go into the loan?
Usually yes. This calculator charges sales tax on the price minus your trade-in, then adds it to the amount financed, so you pay interest on it too. Tax rules vary by state — some states tax the full price, and some give no trade-in credit — so check your state's rules before you buy.
Is a longer loan term better?
A longer term lowers the monthly payment but raises the total interest a lot. On the example car, 36 months costs $828.44 a month with $2,793.93 of interest, while 72 months costs $454.37 a month but $5,684.81 of interest — almost $2,900 more for the same car.
What APR can I expect on a car loan?
It depends on your credit score and the lender. In 2026, buyers with excellent credit often see rates near 5%, while lower scores can mean 10% or more. A lower APR matters more than a longer term: dropping from 8.5% to 4.5% on the example car saves about $51 a month and $3,038 in total interest.