Auto Loan Calculator
↻ Updated 2026Enter the vehicle price, down payment, trade-in, tax rate, APR and term to see your monthly payment, how much interest you'll pay, and the true total cost of the car.
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Runs entirely in your browser — nothing you enter is sent to us.How this works
How to read your car payment
The monthly payment is the number you negotiate on, and it's the number that hides the most. On the defaults, $642.55 a month looks like a $35,000 car — it's actually a $43,552.93 car, because $2,450 of sales tax and $6,102.93 of interest ride along behind the sticker. Total cost is the only line here that reflects what leaves your bank account.
How your monthly car payment and total interest are calculated
Four things happen in order. Sales tax is charged on the price less your trade-in. That tax is added to the price. Your down payment and trade-in come off. Whatever's left is financed on a standard fixed-rate amortization.
The ordering is what surprises people. Tax is computed before your down payment is applied, not after — a down payment reduces the loan, never the tax bill. A trade-in reduces both, which is why the two aren't interchangeable even at identical dollar values.
sales tax = (price − trade-in) × tax rate amount financed = price + sales tax − down − trade-in monthly payment = P × r ÷ (1 − (1 + r)^−n) where P = amount financed, r = APR ÷ 12, n = term in months each month: interest = balance × r balance = balance − (payment − interest) total cost = price + sales tax + total interest
- price
- The negotiated out-the-door price of the vehicle — before tax; excludes registration, title, doc and dealer fees, which this model does not carry
- trade-in
- What the dealer credits you for your old car — reduces the taxable amount and the loan — worth more than the same cash in most states
- tax rate
- Your combined state and local vehicle sales tax rate — varies by state and often by county; five states charge none at all
- down
- Cash you put in at signing — reduces the loan only — it does not reduce the tax, because tax is computed first
- APR
- The annual percentage rate on the loan — divided by 12 for the monthly rate; Edmunds put the June 2026 average at 7% on new cars and 10.5% on used
- n
- The term in months — the slider runs 12 to 84 in six-month steps
The tax treatment here follows what most US states do: tax the difference between the price and the trade-in. It isn't universal. A handful of states tax the full purchase price with no trade-in credit, and Alaska, Delaware, Montana, New Hampshire and Oregon charge no state vehicle sales tax at all — set the rate to 0% and the tax line disappears.
One thing the total-cost figure still misses: it's the cost of the loan and the car, not the cost of owning the car. Insurance, fuel, maintenance and depreciation are all larger than the interest for most drivers. The true cost of ownership calculator adds those up.
Worked examples
Example: a $35,000 car at 7% APR over 60 months
The calculator's defaults, so you can follow along on the page. $5,000 down, no trade-in, 7% sales tax, 7% APR, five years.
| Vehicle pricethe sticker you negotiated | $35,000.00 |
| Sales tax$35,000 × 7% — no trade-in to offset it | + $2,450.00 |
| Down payment14.3% down | − $5,000.00 |
| Amount financednote the tax is inside the loan | $32,450.00 |
| Monthly paymentfor 60 months | $642.55 |
| Total of payments$642.55 × 60 | $38,552.93 |
| Total interest18.8% of the amount financed | $6,102.93 |
| Total costprice + tax + interest | $43,552.93 |
The $35,000 car costs $43,552.93. The gap is $8,552.93 — tax you'd owe regardless, plus five years of interest on a balance that includes that tax. Financing the $2,450 of tax rather than paying it at signing costs about $461 of the interest total on its own.
Example: what the term slider actually costs
Everything else held at the defaults — $32,450 financed at 7%. Only the term moves. Each of these is reachable on the six-month step.
| 36 months$3,620.62 total interest | $1,001.96/mo |
| 48 months$4,848.67 total interest | $777.06/mo |
| 60 months$6,102.93 — the default | $642.55/mo |
| 72 months$7,383.30 total interest | $553.24/mo |
| 84 months$8,689.63 total interest | $489.76/mo |
Going from 36 to 84 months drops the payment by $512.20 and raises the interest by $5,069.01. The payment falls fast at first and then flattens — the last two years of term buy only $63.48 a month while adding $1,306.33 of interest. That flattening is why 84-month loans are common and why the marginal case for them is weak: you're paying steadily more for steadily less relief.
Frequently asked questions
Is a 72 month car loan a bad idea?
The arithmetic is unambiguous even if the decision isn't. On the defaults here, 72 months costs $7,383.30 in interest against $4,848.67 over 48 — you pay $2,534.63 more for the same car to save $223.82 a month. Whether that's bad depends on what the $223.82 does for you.
The real hazard isn't the interest, it's the equity curve. A car depreciates faster than a long loan amortizes, so you spend years owing more than the car is worth. Total an underwater car and the insurer pays market value, leaving you with the gap. The car depreciation calculator plots the value side of that race.
Do you pay sales tax on a car trade-in?
In most states, no — the trade-in value is subtracted before tax is calculated, and that's what this calculator models. Trade a car worth $10,000 against a $35,000 purchase and you're taxed on $25,000, which at 7% is $1,750 instead of $2,450. The trade-in saved you $700 in tax on top of its $10,000 of value.
That's the mechanism that makes a trade-in worth more than the same money in cash. Cash reduces the loan; a trade-in reduces the loan and the tax base. A few states give no trade-in credit and tax the full price, and five states — Alaska, Delaware, Montana, New Hampshire and Oregon — have no vehicle sales tax to credit against. Your state's revenue department is the authority; dealer arithmetic is not.
How much should I put down on a car?
The widely repeated benchmark is 20% on a new car and 10% on a used one, and the reason given is almost always depreciation rather than interest. A new car loses roughly 20% in its first year, so anything less than about 20% down leaves you underwater the moment you drive off — you owe more than the car fetches.
This calculator's default is $5,000 on $35,000, which is 14.3% — deliberately below that benchmark, so the effect is visible. Note what a down payment does and doesn't do here: it reduces the amount financed and therefore the interest, but it does not reduce your sales tax, because tax is charged on the price before your cash is applied.
Can you finance sales tax into a car loan?
Usually yes, and this calculator assumes you do — that's why the amount financed on the defaults is $32,450 rather than $30,000. Lenders generally allow tax, title and fees to be rolled in as long as the total stays inside their loan-to-value limit, which is why buyers with thinner credit are more often asked to bring the tax in cash.
It isn't free. Rolling $2,450 of tax into a 60-month loan at 7% adds about $461 of interest and roughly $48.50 a month. It also deepens the negative-equity hole at the start, because you've financed something that has no resale value whatsoever. Paying tax at signing and financing $30,000 instead produces a $594.04 payment and $5,642.16 of interest.
Is car loan interest tax deductible?
For the first time in decades, sometimes — and this calculator does not model it. The One, Big, Beautiful Bill Act created a deduction of up to $10,000 a year of interest on qualifying personal vehicle loans for tax years 2025 through 2028. Treasury and the IRS have issued guidance on it, and lenders now report the interest on Form 1098-VLI.
The conditions are narrow. The vehicle must be new, for personal use, under 14,000 pounds gross weight, and have undergone final assembly in the United States; the loan must have originated after 31 December 2024 and be secured by the vehicle. Used cars, leases and business use don't qualify. It phases out once modified AGI passes $100,000 single or $200,000 joint, and is available whether you itemise or not. The $6,102.93 above is a pre-tax figure.
What is a good APR for a car loan?
Relative to the market, and the market moved. Edmunds put the June 2026 average at about 7% APR on new-car loans and 10.5% on used — which is why this page defaults to 7%. Rates track credit score more than anything else: buyers above 750 averaged near 5%, while fair credit in the 600s averaged above 11%.
The spread is worth more than most negotiating. Financing $32,450 over 60 months at 5% costs $4,292.29 in interest; at 11% it costs $9,882.50. That's a $5,590.21 difference on an identical car — considerably more than most people extract from haggling over the price, and available to anyone who shops the loan separately from the vehicle.
What this auto loan calculator leaves out
The amortization is exact. The things surrounding it are simplified, and a few of them are large.
- Registration, title, doc and dealer fees — None of them are here. Documentation fees alone run from a few dollars to several hundred depending on state, and title and registration are on top. They're typically financed alongside the car, so the real amount financed — and the real interest — is higher than this page shows.
- Your state's actual tax rule — The model taxes price minus trade-in, which is what most states do but not all. Some tax the full price with no trade-in credit; some cap the credit; some tax a lease's monthly payment instead of its cap cost. There is no lookup table behind the tax slider — the rate and the rule are both assumptions you're supplying.
- The new-vehicle loan interest deduction — The total interest figure is pre-tax. For a qualifying US-assembled new car bought on a loan originated after 2024, up to $10,000 of annual interest may be deductible through 2028, which would make the after-tax cost of borrowing lower than the number shown here.
- Gap insurance and negative equity — Rolling an underwater trade-in into a new loan is common and is not modelled — the trade-in field only accepts positive values. If you owe more than your old car is worth, that shortfall gets added to the new loan and the payment above is understated.
- Everything after the loan — Total cost here means price, tax and interest. It is not the cost of the car. Depreciation alone usually exceeds the interest by several multiples over five years, and insurance and fuel are each in the same range as the total interest.
- ·Standard auto-loan amortization; depreciation & running costs are estimates
Rates, brackets and limits here are checked against primary sources. If a number still looks off, email support@realmoneyiq.com and we'll review and fix it.
RealMoneyIQ provides free educational calculators, not financial, tax, investment or legal advice. Results are estimates based on the assumptions you enter and publicly published rates; your actual outcome will differ. Always confirm decisions with a licensed professional who knows your full situation.