Auto Loan Calculator
This auto loan calculator estimates the monthly payment on a car loan after accounting for your down payment, any trade-in value, and sales tax on the financed amount. It subtracts the down payment and trade-in from the vehicle price, adds sales tax on what remains, and finances that net figure at your rate and term using the standard loan formula. The result shows your monthly payment along with the financed amount, sales tax charged, total interest, total cost, and an estimated payoff date.
Formula
M = L · r(1 + r)^n / ((1 + r)^n − 1), L = (Price − Down − Trade) × (1 + tax%)
- L
- Net loan = taxable base × (1 + sales tax ÷ 100)
- r
- Monthly rate = annual rate ÷ 12 ÷ 100
- n
- Number of payments = years × 12
- M
- Monthly car payment
How it works
- Enter the vehicle price, your cash down payment, and any trade-in value. These are subtracted from the price to find the taxable base amount being financed.
- Apply the sales tax percentage to that base amount; the tax is added on top, producing the net loan that is actually borrowed.
- Set the annual rate and term in years. The calculator computes the monthly payment with the annuity formula and totals the interest and overall cost, then projects a payoff date that many years from today.
Worked example
A $35,000 vehicle with $5,000 down, a $3,000 trade-in, 7% sales tax, financed at 6% over 5 years.
- Taxable base = 35,000 − 5,000 − 3,000 = $27,000; sales tax = 27,000 × 7% = $1,890.
- Net loan = 27,000 + 1,890 = $28,890; monthly rate = 6 ÷ 12 ÷ 100 = 0.005 over 60 payments.
- M = 28,890 × 0.005 × 1.005^60 ÷ (1.005^60 − 1) = $558.52 per month.
The monthly payment is about $558.52, the financed amount is $28,890 (including $1,890 sales tax), total interest is roughly $4,621.48, and the total cost is about $33,511.48.
Frequently asked questions
- How does a trade-in affect the loan?
- The trade-in value is subtracted from the price along with your down payment before tax is applied, so it lowers both the financed amount and the sales tax in states that tax the net price. A larger trade-in directly reduces your monthly payment.
- Is sales tax applied to the full price or the net amount?
- This calculator applies sales tax to the price after subtracting the down payment and trade-in. Tax rules vary by state, so if your state taxes the full vehicle price, enter the down payment and trade-in as zero to match that treatment.
- Does the payment include insurance, registration, or fees?
- No. It covers loan principal, interest, and sales tax on the financed amount only. Insurance premiums, registration, documentation fees, and extended warranties are separate costs not included in the monthly figure.