Calculate Your Auto Loan Payment
Buying a car is the second-largest purchase most Americans make. This calculator shows your exact monthly payment, total interest, and total cost of the loan - based on vehicle price, down payment, trade-in, sales tax, and loan term. Compare offers, negotiate smarter, and avoid dealer markup.
What This Calculator Does
Enter the vehicle price, down payment, trade-in value, sales tax rate, loan term, and interest rate. The calculator returns:
- Amount financed
- Monthly payment (principal + interest)
- Total interest paid over the loan term
- Total cost of the vehicle
- Estimated monthly sales tax impact
The Auto Loan Formula
- M = monthly payment
- P = principal (price - down payment - trade-in + sales tax + fees)
- r = monthly rate (APR ÷ 12)
- n = total payments (months)
Worked Example: $35,000 Car, $5,000 Down
- Vehicle price: $35,000
- Down payment: $5,000
- Trade-in: $0
- Sales tax (7%): $2,100
- Fees: $500
- Amount financed: $32,600
- Rate: 7.5% APR, 60 months
- Monthly payment: $653
- Total interest: $6,580
- Total cost: $44,180
15 Ways to Lower Your Monthly Car Payment
- Increase your down payment - $2,000 down reduces monthly by ~$40
- Get pre-approved by a credit union before visiting the dealer
- Improve your credit score - 740+ gets the best rates
- Choose a longer term (72-84 months) - lowers monthly but raises total interest
- Buy used instead of new - depreciation savings
- Negotiate the out-the-door price, not the monthly payment
- Get 3+ written offers from competing dealers
- Avoid dealer-arranged financing - usually marked up 1-3%
- Consider a co-signer with strong credit
- Wait for end-of-month or end-of-quarter sales
- Buy a model being replaced by a new year
- Skip add-ons (extended warranty, GAP, paint protection)
- Make a larger down payment with a trade-in
- Take a shorter term if you can afford it - saves thousands in interest
- Refinance later if rates drop or your credit improves
New vs Used Auto Loans
| Loan Type | Typical Rate Range | Typical Term |
|---|---|---|
| New car (dealer) | 5% - 8% | 48-72 months |
| New car (credit union) | 4% - 7% | 48-72 months |
| Used car (dealer) | 6% - 12% | 36-60 months |
| Used car (credit union) | 5% - 10% | 36-60 months |
| Bad credit (subprime) | 12% - 20% | 36-72 months |
Understanding Sales Tax on Cars
Most states charge sales tax on the full vehicle price (minus trade-in in some states). Rates range from 0% (Oregon, Montana, New Hampshire, Delaware, Alaska) to over 10% (in certain California and Louisiana jurisdictions). Some states also charge an annual property tax on vehicles.
Frequently Asked Questions
What is a good interest rate for a car loan?
As of 2026, prime borrowers (credit score 720+) can find rates around 5-7% for new cars and 6-9% for used cars. Credit unions often beat banks and dealers.
How much should I put down on a car?
At least 20% for new cars and 10% for used cars. This avoids being underwater (owing more than the car is worth) and lowers monthly payments.
How long should my auto loan be?
48-60 months is the sweet spot. 72-84 month loans have lower payments but higher total interest and a longer underwater period.
Can I refinance my auto loan?
Yes. If your credit has improved or rates have dropped, refinancing can save thousands. Our refinance calculator shows potential savings.
Does the dealer markup my interest rate?
Yes - dealers often add 1-3% on top of the rate the lender approves. Always get pre-approved independently.
Should I buy GAP insurance?
Only if you are putting less than 20% down or financing a car that depreciates quickly. Otherwise, standard insurance is enough.