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Free Car Loan Calculator

Estimate the monthly payment on a car loan from the vehicle price, down payment, trade-in value, sales tax, annual rate (APR) and term in months. The calculator shows the amount financed, the monthly payment, the total you will pay over the loan, and the total interest cost.

Estimated monthly payment
$471.78
Sales tax
$0.00
Amount financed (loan)
$25,000.00
Number of payments
60
Total paid
$28,306.85
Total interest
$3,306.85

Principal, interest and sales tax only — excludes registration, title, documentation fees, gap insurance and warranties. Estimate only.

Estimate only. This calculator provides estimates based on the values you enter and the formula shown. It is not financial advice and may not reflect every fee, tax, or lender requirement. Check figures with a qualified professional before making financial decisions.

Quick answer

Your monthly auto loan payment is M = L × i(1 + i)^N ÷ [(1 + i)^N − 1], where L is the amount financed (vehicle price plus sales tax, minus down payment and trade-in), i is the monthly interest rate (APR ÷ 12 ÷ 100), and N is the number of monthly payments. For example, financing $25,000 at 5% APR over 60 months gives about $471.78 per month, or $28,306.85 in total — $3,306.85 of it interest.

Formula & method

The calculator first finds the amount financed: it adds sales tax (charged on the vehicle price) to the price, then subtracts your down payment and any trade-in value. It converts the annual percentage rate (APR) to a monthly rate by dividing by 12, and uses the standard amortization formula M = L × i(1 + i)^N ÷ [(1 + i)^N − 1] to find the level monthly payment that pays the loan off in N months. Multiplying the payment by N gives the total amount paid, and subtracting the amount financed leaves the total interest. If the rate is zero, the payment is simply the loan divided by the number of months. Every figure is computed in your browser; nothing is sent to a server.

Examples

Example 1: $30,000 car, $5,000 down, 5% APR, 60 months
Input
Price $30,000, down $5,000, trade $0, tax 0%, 5% APR, 60 months
Result
Loan $25,000 · payment ≈ $471.78/mo
Why
L = 30,000 − 5,000 = 25,000. i = 5 ÷ 100 ÷ 12 = 0.00416667. M = 25,000 × 0.00416667 × (1.00416667)^60 ÷ ((1.00416667)^60 − 1) ≈ 471.78. Total paid = 471.78 × 60 = $28,306.85, so interest = $3,306.85.
Example 2: $40,000 truck with trade-in and 6% sales tax
Input
Price $40,000, down $4,000, trade $6,000, tax 6%, 6.9% APR, 72 months
Result
Loan $32,400 · payment ≈ $550.83/mo
Why
Tax = 40,000 × 6% = 2,400, so L = 40,000 + 2,400 − 4,000 − 6,000 = 32,400. i = 6.9 ÷ 1200 = 0.00575. Over 72 months M ≈ 550.83. Total paid ≈ $39,660.00 and total interest ≈ $7,260.00.
Example 3: $22,000 used car, 7.25% sales tax, 48 months
Input
Price $22,000, down $2,000, trade $0, tax 7.25%, 4.5% APR, 48 months
Result
Loan $21,595 · payment ≈ $492.44/mo
Why
Tax = 22,000 × 7.25% = 1,595, so L = 22,000 + 1,595 − 2,000 = 21,595. i = 4.5 ÷ 1200 = 0.00375. Over 48 months M ≈ 492.44. Total paid ≈ $23,637.18 and total interest ≈ $2,042.18.

When to use this tool

  • Estimating the monthly payment before you visit a dealer or apply for financing.
  • Comparing loan terms (for example 48 vs 72 months) or different APRs to see the effect on payment and total interest.
  • Checking how a larger down payment or a trade-in changes the amount financed and the monthly cost.
  • Working out a budget-friendly vehicle price by adjusting inputs until the payment fits your monthly cash flow.

Common mistakes

  • Entering the APR as a monthly rate. Enter the full annual percentage rate; the calculator divides by 12 for you.
  • Forgetting sales tax. In most U.S. states tax is charged on the purchase, which increases the amount you finance and your monthly payment.
  • Confusing the down payment with the loan amount. The loan is the price plus tax minus your down payment and trade-in, not the sticker price.
  • Ignoring fees and add-ons. Doc fees, title, registration, gap insurance and dealer add-ons can be rolled into the loan and raise the real payment beyond this estimate.
  • Comparing payments instead of total cost. A longer term lowers the monthly payment but usually increases total interest, so compare the total paid as well.

Frequently asked questions

How is the car loan payment calculated?

The calculator uses the standard amortization formula M = L × i(1 + i)^N ÷ [(1 + i)^N − 1]. L is the amount financed, i is the monthly rate (APR ÷ 12 ÷ 100), and N is the term in months. This gives a fixed payment that pays the loan to zero over the term, with each payment covering interest first and the rest reducing the balance.

Is sales tax included in the loan?

This tool adds sales tax to the vehicle price and includes it in the amount financed, which is how most U.S. auto loans work when tax is rolled into the loan. Tax is applied to the price only, before subtracting the down payment and trade-in. Tax rules and the taxable amount vary by state, so confirm the exact figure with your dealer.

Does a trade-in lower my payment?

Yes. A trade-in reduces the amount you finance, just like a cash down payment. In the calculator the loan amount is price plus tax minus down payment minus trade-in, so a larger trade-in value means a smaller loan and a lower monthly payment.

What is APR and how does it differ from the interest rate?

APR (annual percentage rate) reflects the yearly cost of borrowing. For a simple auto loan the APR and the nominal interest rate are usually the same, but APR can also include certain lender fees. Enter the APR your lender quotes; the calculator converts it to a monthly rate by dividing by 12.

Why does a longer term cost more even though the payment is lower?

Stretching the loan over more months lowers each payment, but you pay interest for longer, so the total interest grows. For example, the same loan over 72 months has a smaller payment but a higher total cost than over 48 months. Compare the total paid, not just the monthly figure.

Does this calculator include taxes, fees and insurance?

It includes sales tax on the vehicle price and the loan principal and interest. It does not include registration, title, documentation fees, gap insurance, extended warranties or ongoing costs like auto insurance and fuel. Add those separately when budgeting, and treat the result as an estimate, not a loan offer.

Sources & references

External references open in a new tab. We are independent and not affiliated with these organizations.

Disclaimer

This calculator provides estimates based on the values you enter and the formula shown. It is not financial advice and may not reflect every fee, tax, or lender requirement. Check figures with a qualified professional before making financial decisions.

  • ✓ Free to use
  • ✓ No sign-up required
  • ✓ Runs entirely in your browser — nothing is uploaded.
  • ✓ Formula and method shown above
Last updated: How we calculateReport a correctionDisclaimer

Provided “as is” for general information only — results may be inaccurate, so verify before you rely on them. No warranty; use at your own risk.

Built and reviewed by HIFreeTools against the formula shown above and any authoritative references cited on this page. See our methodology and editorial standards.

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