How is a car payment calculated?

Car payment uses the financed amount, annual interest rate, and loan term in months in a standard amortization formula.

Does sales tax affect financing?

Yes. If tax is added to the vehicle price and financed, your principal and monthly payment both increase.

What is an amortization schedule?

It is a month-by-month table showing how each payment splits between interest and principal and how the balance declines.

Back to Quik-Calc

Finance Tool

Auto Loan Calculator

Project monthly payment, total interest, and full auto financing cost.

Loan Inputs

Vehicle PriceDown PaymentLoan Term (Months)Interest Rate (%)Sales Tax (%)Trade-In Value

Loan Summary

Calculate and unlock your payment and amortization details.

How to use this calculator for a real decision

Enter the vehicle price, down payment, trade-in value, interest rate, and loan term to see your monthly payment and total loan cost. The amortization table shows how much goes to principal vs interest over the life of the loan. Use it to compare financing options from the dealer vs your credit union, test different down payment scenarios, or decide between a 48-month and 72-month term. A longer term means lower monthly payments but significantly more total interest.

Worked example

A $35,000 car with $5,000 down and $2,000 trade-in at 6.5% APR for 60 months: loan amount $28,000, monthly payment $548, total interest $4,880. Same car at 72 months (6.9% APR typical for longer terms): monthly drops to $475, but total interest jumps to $6,200. The extra year costs $1,320 more in interest. If you can afford the $548 payment, the 60-month term saves real money.

Common mistakes to avoid

Focusing only on monthly payment: Dealers love to ask "what monthly payment can you afford?" This obscures the total cost. Always negotiate the out-the-door price first.

Ignoring the APR in favor of the rate: Some ads show low rates but add fees. APR includes everything. Compare APRs, not teaser rates.

Rolling negative equity into a new loan: If you owe more than the car is worth, adding it to a new loan means paying interest on debt for a car you no longer drive.

Forgetting insurance costs: A new or financed car requires full coverage insurance, which can add $100-300/month depending on your profile.

Key terminology

APRAnnual Percentage Rate — total yearly cost of borrowing including fees

Loan-to-value (LTV)the ratio of loan amount to vehicle value, affects interest rate offered

Negative equityowing more on the loan than the vehicle is worth

Depreciationthe rate at which a vehicle loses value, typically 15-20% per year

Prepayment penaltya fee for paying off the loan early, rare but worth checking

Frequently asked questions

What is a good APR for a car loan?

Excellent credit (720+): 4-6% for new cars, 6-8% for used. Good credit (680-719): 6-9% new, 8-12% used. Check credit unions for the best rates.

Should I put more money down?

At least 20% down prevents being underwater (owing more than the car is worth) in the first year. More down means lower payments and less interest.

Is 72 months too long for a car loan?

72+ month loans increase total interest substantially and risk negative equity for longer. Only choose extended terms if the lower payment is essential for your budget.

Can I refinance an auto loan?

Yes — if your credit has improved or rates have dropped, refinancing can save money. Use the calculator with your current balance and a new rate to compare.