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Auto Loan Calculator

Estimate your monthly car loan payment from price, trade-in, down payment, sales tax, rate, and term.

How this calculator works

Enter the vehicle price, any trade-in and down payment, your state’s sales tax rate, the loan’s interest rate, and the term in months. This calculator computes the taxable amount (price minus trade-in), the sales tax, the total amount financed, and your estimated monthly payment using the same amortization math as our mortgage calculator.

The formula

taxableAmount   = max(0, vehiclePrice − tradeInValue)
salesTax        = taxableAmount × salesTaxRate

amountFinanced  = max(0, vehiclePrice + salesTax − downPayment − tradeInValue)

M = amountFinanced × (r/12) × (1 + r/12)^n / ((1 + r/12)^n − 1)
where r = annual interest rate, n = termMonths
(if r = 0: M = amountFinanced / n)

Worked example

A $40,000 vehicle with a $5,000 trade-in, no down payment, 6% sales tax, financed at 7% for 60 months:

  • Taxable amount: $40,000 − $5,000 = $35,000
  • Sales tax: $35,000 × 6% = $2,100
  • Amount financed: $40,000 + $2,100 − $0 − $5,000 = $37,100
  • Monthly payment: $734.62/month at 7% over 60 months (based on the $37,100 amount financed)

Frequently asked questions (FAQ)

Does my trade-in reduce the sales tax I pay?

In most states, yes — sales tax is charged on the price minus your trade-in value, which is what this calculator assumes by default. A few states tax the full purchase price regardless of trade-in, so check your state's rule and adjust the sales tax rate here if needed.

What's a typical auto loan interest rate?

Rates vary widely by credit score, loan term, and whether the car is new or used — often somewhere between 5% and 15%. Shop multiple lenders (banks, credit unions, and dealer financing) before committing, since rates can differ substantially for the same borrower.

Should I finance the sales tax, or pay it upfront?

Financing the tax (rolling it into the loan, as this calculator does by default) spreads the cost over the loan term but means paying interest on it. Paying sales tax upfront in cash avoids that extra interest, if you have the cash available.

Is financing a new US-built car's interest tax-deductible?

For 2025-2028, interest on loans for new (not used) vehicles with final assembly in the United States may be deductible up to $10,000/year, subject to income phase-outs — see our Car Loan Interest Deduction calculator for the details and to estimate your deduction.

How does a longer loan term affect total interest?

A longer term (like 72 or 84 months instead of 60) lowers your monthly payment but increases the total interest paid over the life of the loan, since the balance takes longer to pay down. Try different terms here to compare the trade-off.

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