Car Loan Calculator
The monthly payment on a car, and what it costs once the interest is in.
Good to know. Dealers talk in monthly payments. The total is the number that tells you what you paid.
Not financial advice. Uses only the numbers and rates you enter — no live data.
How it works
In plain words
The loan is the price plus sales tax and fees, less the down payment and trade-in. Sales tax is charged on the price less the trade-in. The monthly payment is the level payment that clears the loan over the term, the same as any car or home loan.
The formula
Tax = (price − trade-in) × tax rate Loan = price + tax + fees − down payment − trade-in Payment = Loan × i ÷ (1 − (1 + i)^−n), with i = APR ÷ 12
Worked example
A 35,000 car with 5,000 down and 7% sales tax means borrowing 32,450. At 7% over 60 months the payment is 642.55 a month, with 6,102.93 of interest.
Sources
- Brealey, Myers and Allen, Principles of Corporate Finance, chapter 2 The standard formulas for loan payments, compounding and present value, the same as a spreadsheet’s PMT and FV.
Sources checked September 29, 2026. 7 automated tests check its answers on every change.
About the car loan calculator
A car loan works like any other loan: you borrow a fixed amount and pay it back in equal monthly payments over the term. This calculator adds the parts a car deal brings in, the down payment, the car you trade in, sales tax and fees, and shows what you borrow and what it costs.
Longer terms make the payment smaller and the car more expensive. Stretching a loan from 48 to 84 months can lower the payment by a third while adding thousands in interest, and a car loses value faster than a long loan is paid down, so you can owe more than it is worth for years.
In the US, most states charge sales tax on the price less the trade-in, and it is often added to the loan. Where prices already include tax, such as VAT in the UK and Europe, leave the tax at 0.
Get a loan offer from a bank or credit union before you visit the dealer, so you can compare its rate with theirs. A 0% offer can still cost more if it replaces a cash discount. And UK personal contract purchase (PCP) deals work differently: a large final payment is left at the end, so the monthly payment here will be higher than a PCP quote.
Questions people ask
What is the payment on a 35,000 car?
With 5,000 down, 7% sales tax and a 7% rate over 60 months, about 643 a month. Over 72 months, about 553.
Is a longer car loan a good idea?
It lowers the payment but costs more interest, and the car loses value faster than the loan shrinks. Most advice is 60 months or less.
Is sales tax included in a car loan?
Usually, in the US it is added to the amount you borrow unless you pay it up front. Most states tax the price less your trade-in.
What is a good APR for a car loan?
It depends on your credit and whether the car is new or used. Compare offers from a bank or credit union with the dealer’s rate.