Car Loan Calculator
The sticker price is not the cost of the car. Get the real monthly payment with tax, down payment, and trade-in included — plus total interest and a check on whether the payment fits your income.
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In most states tax applies to the price minus your trade-in. A few tax the full price — raise the trade-in's effect by setting tax on the dealer quote instead.
Used only for the affordability check below.
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How a car loan payment is calculated
The amount you actually finance is the price plus sales tax, minus your down payment and trade-in. That amount is then amortized over the term: each payment covers interest on the remaining balance first, with the rest reducing principal — the same standard formula as any installment loan.
Amount financed = price + (price − trade-in) × tax rate − down payment − trade-in. Monthly payment = financed × r(1 + r)n ÷ ((1 + r)n − 1), with r = APR ÷ 12 and n = months.
Term length is the dealer's favorite lever because it shrinks the monthly number while growing the real cost. On the default loan, stretching from 60 to 84 months cuts the payment by about $120 — but adds roughly $2,600 in interest and keeps you owing money on an aging car for two extra years.
Frequently asked questions
How much car can I afford?
A widely used guardrail is keeping the payment at or under 10% of gross monthly income — and total car costs (payment, insurance, fuel, maintenance) under about 15–20%. The affordability line above uses the payment-only 10% guide; if insurance quotes come back high, aim lower.
What is the 20/4/10 rule?
A popular car-buying rule: put at least 20% down, finance for no more than 4 years, and keep total monthly car costs under 10% of gross income. It errs on the strict side — deliberately — because cars lose value while loans don't.
Why avoid 72- and 84-month loans?
Cars depreciate fastest in the first years, while long loans build equity slowly — so you can owe more than the car is worth (“underwater”) for much of the term. That traps you if the car is totaled or you need to sell: the loan balance is due in full either way.