How to use the car loan calculator
- Enter the vehicle price and your down payment.
- Add your trade-in value and any amount you still owe on it.
- Enter your state’s sales tax rate and the dealer’s fees, and choose whether to roll them into the loan.
- Set the interest rate and the loan term in months.
The comparison table shows your payment and total interest for each common term, so you can see what a longer loan really costs.
How your car payment is calculated
Loan amount = price − down payment − (trade-in value − amount owed) + taxes and fees
Monthly payment =
L × i ÷ (1 − (1 + i)−n), with i the monthly rate and n the number of monthsSome states tax the full price regardless of your trade-in, and dealer fees vary, so check the numbers on your purchase agreement.
Example: how the loan term changes the cost
Take a hypothetical $35,000 car with $4,000 down, a $6,000 trade-in with $2,000 still owed, 7% sales tax ($2,030), $900 in fees and a 7.5% APR. With taxes and fees financed, you borrow $29,930.
| Term | Monthly payment | Total interest |
|---|---|---|
| 36 months | $931.01 | $3,586 |
| 48 months | $723.67 | $4,806 |
| 60 months | $599.74 | $6,054 |
| 72 months | $517.49 | $7,330 |
| 84 months | $459.07 | $8,632 |
Stretching the loan from 60 to 84 months lowers the payment by about $141 but adds about $2,600 in interest. Long loans also make it more likely you’ll owe more than the car is worth.
Tips for a cheaper car loan
- Get preapproved by a bank or credit union before you visit the dealer, so you can compare its offer.
- Check your credit score; it has a big effect on the rate you’re offered. See our guide to credit scores.
- Negotiate the price first, then the financing and your trade-in separately.
- Compare offers by APR, which includes many fees. Our loan APR calculator shows the true cost of borrowing.
- Keep the term as short as you can afford and put down at least enough to avoid owing more than the car is worth.
Frequently asked questions
What is a good interest rate for a car loan?
It depends on your credit score, the loan term, whether the car is new or used and current market rates. Compare quotes from your bank, a credit union and the dealer to see what you qualify for.
Should I roll taxes and fees into the loan?
Paying them upfront means you borrow less and pay less interest. Financing them keeps more cash in your pocket today but costs more over the life of the loan.
How does a trade-in lower my payment?
Its value reduces the amount you borrow and, in many states, the sales tax. If you still owe money on the trade-in, that balance is subtracted from its value first.
Is it better to lease or buy?
Leasing usually means lower monthly payments, but you don’t own the car at the end. Compare both with our auto lease calculator.
How much car can I afford?
Many budgeting guides suggest keeping your total car costs, including insurance and fuel, to a modest share of your take-home pay. Our budget calculator helps you see what fits.
Related calculators and guides
Results are estimates, not a loan offer. Taxes, fees and rates vary by state, lender and vehicle.