Car Loan Calculator
A car loan calculator turns a sticker price into a real monthly payment. It folds in the two things that catch buyers out: sales tax, which most dealers finance along with the car, and your trade-in, which reduces the amount you borrow. Enter the vehicle price, your down payment, any trade-in value, the tax rate, the interest rate, and the term to see your monthly payment and what the car actually costs you once interest is counted.
- Principal
- Interest
- Loan amount
- $25,000.00
- Total interest
- $5,056.92
- Total cost (price + tax + interest)
- $35,056.92
- Total of payments
- $30,056.92
- Term
- 5 yr
You will pay about 5057 in interest over 60 months. Note that 0 of sales tax is rolled into the loan, so you pay interest on the tax too — your true cost of this car is about 35057.
Amortization schedule
| Year | Payment | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | $6,011.38 | $1,729.81 | $4,281.58 | $20,718.42 |
| 2 | $6,011.38 | $1,397.42 | $4,613.97 | $16,104.46 |
| 3 | $6,011.38 | $1,039.22 | $4,972.16 | $11,132.29 |
| 4 | $6,011.38 | $653.22 | $5,358.16 | $5,774.13 |
| 5 | $6,011.38 | $237.25 | $5,774.13 | $0.00 |
Ways to optimize
Real what-if scenarios calculated from your numbers.
Scenarios use the exact same math as the calculator — no estimates.
How it works
The amount you finance is not the sticker price. Start with the vehicle price, add sales tax (charged on the price in most regions), then subtract your cash down payment and the value of any vehicle you trade in. The result is the loan principal. Your payment is then a standard reducing-balance installment on that principal: each month interest is charged on the outstanding balance, the rest of the payment cuts the balance, and the payment stays level until the car is paid off.
Because the tax is usually rolled into the loan rather than paid in cash, you end up paying interest on the tax as well as on the car. That is why the "true cost" line here adds the price, the tax, and every dollar of interest together — it is the number that matters when you compare financing offers or decide how much car you can really afford.
Loan = vehicle price + sales tax − down payment − trade-in, where sales tax = vehicle price × tax rate. Monthly payment = Loan · i · (1 + i)^n / ((1 + i)^n − 1), with i = annual rate ÷ 12 ÷ 100 and n = years × 12. True cost = vehicle price + sales tax + total interest.
Worked example
Take a 30,000 vehicle with 5,000 down, no trade-in, an 8% sales tax, a 7.5% rate, and a 5-year (60-month) term. Sales tax is 30,000 × 8% = 2,400, so the amount financed is 30,000 + 2,400 − 5,000 = 27,400. At 7.5% over 60 months the monthly payment is about 549. You repay roughly 32,930 over the loan, meaning about 5,530 in interest. Add it up and the true cost of the car is 30,000 + 2,400 + 5,530 ≈ 37,930 — well above the 30,000 sticker.
Things to watch out for
If you owe more on your trade-in than it is worth, that negative equity is often added to the new loan, raising the principal above the car price plus tax — enter the price net of that gap to model it. A 0% manufacturer offer removes interest entirely, but you still finance the tax, so the true cost is price plus tax. Some regions tax the price after the trade-in is deducted rather than before; if so, lower the tax rate slightly or reduce the price to approximate it. Longer terms (72 or 84 months) cut the monthly payment but pile on interest and keep you "underwater" longer.
Frequently asked questions
Is sales tax included in my car loan?+
In most places the dealer adds sales tax to the financed amount rather than collecting it in cash, so you pay interest on the tax too. This calculator adds the tax to the loan and shows its effect on your true cost.
How does a trade-in change my payment?+
Your trade-in value is subtracted from the amount you borrow, just like extra cash down. A higher trade-in means a smaller loan, a lower monthly payment, and less total interest.
Should I take a longer loan term to lower the payment?+
A longer term reduces each payment but increases total interest and keeps you owing more than the car is worth for longer. Compare the total cost line across terms, not just the monthly figure.
What is the "true cost" figure?+
It is the vehicle price plus sales tax plus all the interest you pay over the loan. It shows what the car really costs you once financing is included, which is usually well above the sticker price.
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Disclaimer: This calculator is for educational and informational purposes only and provides estimates, not financial advice. Interest rates, taxes, fees, and local rules vary and change over time. Confirm figures with a qualified professional before making any financial decision.
Last reviewed: 2026-06-22