How to use this calculator
Enter the vehicle price, any down payment (in dollars or as a percentage), and your trade in value if applicable. Set your state sales tax rate and the interest rate (APR) you expect to receive.
Select a loan term from 24 to 84 months. The calculator instantly shows your monthly payment, total interest, amount financed, true cost of the car, and loan to value ratio at purchase.
Understanding car loan costs
The true cost of a car goes beyond the sticker price. Sales tax adds thousands, and interest over a multi year loan adds even more. A $35,000 car with 7% tax and 6.5% APR over 60 months actually costs over $42,000 when you add it all up.
Your loan to value ratio matters because cars depreciate quickly. If your LTV is over 100% at purchase, you are immediately underwater. Making a larger down payment or choosing a shorter term helps you build equity in the vehicle faster.
Frequently asked questions
How is the monthly payment calculated?
The monthly payment uses the standard amortization formula. The loan amount (price plus tax minus down payment minus trade in) is divided into equal payments that cover both principal and interest over the term.
What is a good APR for a car loan?
For borrowers with excellent credit (750+), rates of 4 to 6 percent are typical for new cars. Good credit (700 to 749) usually gets 6 to 8 percent. Used car rates run 1 to 2 percent higher than new car rates.
Should I put money down?
Yes. A 10 to 20 percent down payment reduces your loan balance, lowers monthly payments, may qualify you for better rates, and prevents negative equity as the car depreciates.
Is sales tax included in the loan?
Usually yes. Most buyers roll sales tax into the financed amount rather than paying it upfront. This calculator includes tax in the amount financed by default.
What loan term should I choose?
Keep it at 60 months or less if possible. Every 12 months you add to the term costs you significantly more in interest and increases the time you spend underwater on the loan.