Auto Loan Calculator
Sticker price is only one number on a car deal. What you actually pay each month depends on the amount financed, the APR, the term, and a pile of add-ons — sales tax, doc fees, a trade-in, any rebate rolled into the loan. This calculator takes all of those inputs, runs the standard amortisation formula, and returns the monthly payment, the total interest over the life of the loan, and the total you will send the lender by the time the title is yours.
How to price an auto loan
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1
Enter the vehicle price
The agreed sale price before tax and fees.
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2
Add the down payment and trade-in value
Both reduce the amount financed dollar for dollar.
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3
Include sales tax and dealer fees
Most states let you finance these; some require them paid up front.
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4
Set the APR and term in months
Typical new-car terms are 36-72 months; 84 is increasingly common but costly.
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5
Read the monthly payment and totals
The calculator prints the amortised payment plus total interest.
The amortisation formula
M = P * r(1+r)^n / ((1+r)^n - 1)
Where P is the amount financed, r is the monthly rate (APR / 12 / 100), and n is the number of monthly payments.
How term length changes the picture
| Term (months) | Payment on $30,000 at 7% APR | Total interest |
|---|---|---|
| 36 | $926 | $3,344 |
| 48 | $718 | $4,479 |
| 60 | $594 | $5,644 |
| 72 | $512 | $6,838 |
| 84 | $453 | $8,060 |
Every extra year adds hundreds of dollars in interest and increases the odds of being upside down.
Being upside down on a car loan
“Upside down” or “underwater” means you owe more than the car is worth. It happens when depreciation outpaces principal repayment — very common with long terms, small down payments and brand-new vehicles that lose 20% in the first year. Gap insurance exists because of this gap.
Tips that actually save money
- Shorter term > lower payment. 48 or 60 months beats 72 almost every time on total cost.
- Negotiate the price, not the payment. Dealers juggle numbers to hit a target monthly and bury money elsewhere.
- Get pre-approved at your bank or credit union. You walk in with a rate to beat, not take.
- 20% down or more. Anything less and you are likely underwater for months.
Frequently Asked Questions
You are borrowing at the APR to cover tax. If your APR is above 4-5%, paying tax out of pocket is cheaper. If you got 0.9% manufacturer financing, rolling in tax barely matters.
The trade-in value reduces the amount financed one-for-one. In most states it also reduces the taxable price — you only pay sales tax on the difference between the new car and the trade-in, which is a genuine saving.
Depends on credit score and market rates. Prime borrowers (740+ FICO) see the advertised rates; subprime can pay three to four times as much. Credit unions are usually 1-2% below captive lenders.
The interest rate is the cost of borrowing. The APR includes the rate plus certain fees amortised over the term, so it is the more honest number to compare between lenders.
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