What This Calculator Does
Buying a car involves more than the sticker price. Sales tax, registration and dealer fees are usually rolled into the loan, while a down payment and trade-in reduce what you borrow. This calculator combines all of those factors to estimate your true monthly auto loan payment, the amount actually financed, and the total interest you'll pay over the life of the loan.
How to Use It
Enter the vehicle price, your local sales tax rate, any fees, your down payment, and the value of a trade-in vehicle. Then add the annual interest rate (APR) and the loan term in months. The tool computes the sales tax on the price, adds fees, subtracts your cash and trade-in, and amortizes the result into equal monthly payments.
The Formula Explained
First the amount financed is built up: \( P = \text{Price} \times (1 + \text{taxRate}) + \text{Fees} - \text{Down} - \text{TradeIn} \). Then the monthly payment uses the standard amortization formula \( \text{PMT} = P \times \dfrac{r}{1 - (1 + r)^{-n}} \), where \(r\) is the monthly interest rate (annual rate \(\div\) 12 \(\div\) 100) and \(n\) is the number of monthly payments. If the rate is 0%, the payment is simply \(P \div n\).
Worked Example
Suppose a $30,000 car with 7% sales tax, $500 in fees, a $3,000 down payment, no trade-in, 5% APR, and a 60-month term. Sales tax is $2,100, so the amount financed is $$30{,}000 + 2{,}100 + 500 - 3{,}000 = \$29{,}600.$$ With a monthly rate of 0.0041667, the payment works out to about $558.59 per month, totaling roughly $33,515 paid and about $3,915 in interest.
FAQ
Is sales tax taxed on the full price or after trade-in? Rules vary by US state. This tool taxes the full vehicle price; some states tax price minus trade-in, which would lower the figure.
Should I include the down payment in the price? No — enter the full price, then list the down payment separately so it correctly reduces the financed amount.
What rate should I use? Use the loan's APR. The calculator converts it to a monthly rate automatically.
