Auto Loan Calculator
Calculate your monthly car payment including sales tax, trade-in, and fees. Results update instantly.
Expert tip: Most financial advisors recommend keeping your monthly car payment below 10% of your take-home pay — including insurance, it shouldn't exceed 15–20%.
Enter your vehicle details below — results update as you type.
Avg new car rate: 7–8% APR for 720+ credit score (Experian, 2026)
Varies by state. Applied to (vehicle price − trade-in). Adjust for your location.
Monthly Payment
$653.24
Fixed for the life of the loan
Loan Amount Breakdown
Total Interest
$6,594.23
Total of Payments
$39,194.23
Payoff Date
April 2031
Results are estimates for educational purposes. Not financial advice. See disclaimer.
Amortization Schedule
| Year | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $7,838.85 | $5,583.18 | $2,255.67 | $27,016.82 |
| 2 | $7,838.85 | $6,016.61 | $1,822.23 | $21,000.21 |
| 3 | $7,838.85 | $6,483.70 | $1,355.15 | $14,516.51 |
| 4 | $7,838.85 | $6,987.04 | $851.80 | $7,529.47 |
| 5 | $7,838.85 | $7,529.47 | $309.38 | $0.00 |
How to Use This Auto Loan Calculator
This calculator shows your real monthly car payment — not just the sticker price divided by months, but the actual amount that includes sales tax, dealer fees, and your trade-in. Enter your numbers and results update instantly.
1. Enter the vehicle price
Use the out-the-door price, the sticker price, or the amount you're negotiating. The U.S. median new car price in 2026 is approximately $48,000, but our default of $35,000 reflects a common purchase point for new compact and midsize vehicles. The calculator works for any amount — new or used.
2. Set your down payment and trade-in
Both reduce how much you finance. A down payment is cash you put in upfront. A trade-in is money the dealer credits against your purchase. They're financially equivalent — but they differ for sales tax purposes. In most states, tax is calculated on the vehicle price minus the trade-in value, making a trade-in slightly more tax-efficient than cash in some situations.
3. Choose your loan term
Auto loans typically run 24 to 84 months. The sweet spot for most buyers is 48–60 months — short enough to avoid being seriously underwater, long enough to keep payments manageable. A 60-month loan at 7.5% on $32,000 costs about $640/month. The same loan at 84 months drops to $490/month but costs $1,700 more in total interest and keeps you in debt 2 years longer.
4. Add sales tax and fees
Click Show advanced options to include sales tax and dealer fees in your financed amount. These are real costs most calculators ignore. On a $35,000 car with 6% sales tax and $500 in fees, you're actually financing about $32,600 — nearly $2,600 more than the price minus your down payment alone. The default 6% reflects the national median; actual rates range from 0% (Montana, Oregon, and a few others) to over 10% in some cities.
How Auto Loan Payments Are Calculated
Auto loans use the same standard amortization formula as any fixed-rate loan. Your payment is the same each month — what changes is the split between interest and principal reduction.
The key for auto loans is that P (principal) includes more than just the car price. The actual loan amount is:
- (Vehicle price − down payment − trade-in) = base financed amount
- + Sales tax on (vehicle price − trade-in)
- + Dealer and government fees
- = Total amount financed (P in the formula)
A worked example
For a $35,000 car, $5,000 down, no trade-in, 60 months at 7.5%, with 6% sales tax and $500 fees:
- Sales tax: $35,000 × 6% = $2,100
- Loan amount: $30,000 + $2,100 + $500 = $32,600
- Monthly rate: 7.5% ÷ 12 = 0.625%
- Monthly payment: ~$652/month
- Total interest: approximately $6,520 over 5 years
Understanding Your Results
Monthly Payment
This is the fixed amount due every month. Your lender will report this payment to credit bureaus — consistent on-time payments improve your credit score over the life of the loan. Budget for this plus insurance (typically $100–$250/month), fuel, and maintenance (roughly $100/month for a new car) to get your true monthly transportation cost.
Total Loan Amount
This is what you're actually financing — after down payment and trade-in credit, plus tax and fees. This number often surprises buyers who assume they're financing just the negotiated price. A $35,000 car with 6% tax and $500 in fees means you're financing $32,600, not $30,000. Knowing this upfront is essential for accurate payment planning.
Total Interest and Total Paid
Total interest is the true cost of financing. On $32,600 at 7.5% for 5 years, you pay about $6,520 in interest — effectively paying $39,120 for a $35,000 car. The same loan at 84 months reduces the monthly payment by $160 but increases total interest to $8,200. The amortization schedule below shows exactly how each payment is allocated month by month.
Frequently Asked Questions
How much car can I afford based on my income?
Most financial experts recommend keeping your monthly car payment below 10% of your take-home pay. If you bring home $5,000/month after taxes, that's $500/month maximum for the car payment alone — before insurance, fuel, and maintenance. A broader rule is keeping total transportation costs (payment + insurance + gas) below 20% of take-home. At $500/month, 7.5% for 60 months, you could finance roughly $24,700.
What is the average auto loan interest rate in 2026?
According to Experian, the average new car loan rate in 2026 is around 7%–8% for well-qualified buyers (720+ credit score), and 10%–14% for near-prime borrowers (620–719). Used car loans run 2%–3% higher on average. Credit unions consistently offer rates 1%–2% below banks. The difference between 6% and 10% on a $32,000 loan over 60 months is about $65/month and over $3,900 in total interest.
How does a trade-in affect my auto loan and taxes?
In most U.S. states, sales tax is applied to the vehicle price minus the trade-in value — not the full purchase price. On a $35,000 car with a $5,000 trade-in and 6% sales tax, you pay tax on $30,000 ($1,800) instead of the full $35,000 ($2,100) — saving $300 in tax. A few states (like Michigan and Virginia) don't offer the trade-in sales tax credit, so rules vary. This calculator assumes the common trade-in tax credit.
Is a 72-month or 84-month auto loan a bad idea?
Longer terms lower monthly payments but significantly increase total cost and risk. A $32,000 loan at 7.5% for 60 months costs $3,900 in interest; at 84 months, the same loan costs $5,600 — nearly $1,700 more. Worse, you'll be underwater (owe more than the car is worth) for most of the loan. If you can't afford a vehicle on a 60-month loan, it's usually a sign the vehicle is out of budget, not that you need a longer term.
What is gap insurance and do I need it?
GAP (Guaranteed Asset Protection) insurance pays the difference between what you owe on your loan and what your car is worth if it's totaled or stolen. New cars lose 15%–20% of value in year one, but your loan balance drops more slowly — so early in the loan you're typically "underwater." GAP coverage costs $20–$40/month through a dealer, or $5–$10/month added to your auto insurance policy. It's worth considering for long-term loans or low down payments.
Can I refinance my auto loan to get a lower payment?
Yes — and auto refinancing is often underused. If your credit score has improved since you bought the car, or market rates have dropped, refinancing can save real money. On a $25,000 balance at 10%, refinancing to 7% saves about $75/month and $1,800 total over a remaining 24-month term. The process is simple: most lenders offer refinancing in minutes online, with no prepayment penalty on the original loan. Best results come in the first 2 years of the loan.
Should I lease or buy a car?
Leasing offers lower monthly payments — typically 20%–30% less than buying — but you're paying to use the car, not own it. At lease end, you have no asset and start the payment cycle again. Buying costs more monthly but builds equity and ends with no payment. The math generally favors buying if you keep the car 5+ years. Leasing makes sense if you want a new car every 3 years, drive under 12,000 miles/year, and value the lower payment over long-term ownership.