Auto Loan Calculator
Calculate the monthly payment on an auto loan from the vehicle price, down payment, trade-in, rate, and term. A straightforward estimate of your car financing cost before tax and fees.
Last updated: May 2026
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About this calculator
This calculator returns the monthly payment on a car loan based on the amount financed, which it computes as the vehicle price minus the down payment and any trade-in value. Unlike a tax-inclusive auto calculator, this version works from the pre-tax price, so it shows the core loan payment before sales tax and fees are added. It applies the standard amortizing-loan formula: M = P × (c × (1 + c)^n) / ((1 + c)^n − 1), where P is the financed amount, c is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly payments (the loan length you select). The result is your fixed monthly payment. The dominant factors are the rate and the term: lengthening the term lowers the monthly payment but increases total interest and the risk of negative equity, since cars depreciate quickly, while a higher rate raises the payment and lifetime cost. A larger down payment or trade-in directly shrinks the financed amount and the payment. Edge cases: a 0% promotional rate makes the payment the financed amount divided by the number of months, and a very short term sharply raises the monthly figure. Because it excludes sales tax, registration, dealer fees, and add-ons like gap insurance or extended warranties, the real out-the-door cost will be higher; add those separately. The model assumes a fixed rate for the entire term.
How to use
Example 1 — a $35,000 car with $5,000 down, an $8,000 trade-in, 5.5% over 5 years (60 months). Enter Car Price = 35000, Down Payment = 5000, Trade Value = 8000, Loan Rate = 5.5, Loan Length = 60 months. The financed amount is $22,000 and the monthly payment is $420.23. Verify: the down payment and trade-in together cut $13,000 off the price before financing. Example 2 — a $45,000 car with $10,000 down, no trade-in, 4.9% over 6 years (72 months). Enter 45000, 10000, 0, 4.9, 72 months. The payment is $562.05. Verify: the larger financed amount ($35,000) and longer term produce a higher payment than the first example despite the lower rate, illustrating how price and term drive the cost.
Frequently asked questions
Why is this payment lower than my actual quote?
This calculator works from the pre-tax vehicle price, so it shows the core loan payment before sales tax, registration, and dealer fees are added to the amount financed. In most states, sales tax alone can add several percent to the price, raising the financed balance and the monthly payment. Dealer documentation fees and any add-ons like gap insurance or an extended warranty increase it further if rolled into the loan. To match your dealer quote, add the taxes and fees to the financed amount, or use a tax-inclusive auto loan calculator. The figure here is best for a quick, conservative estimate of the base loan.
How much car can I actually afford?
A common guideline is to keep your total monthly car costs — payment plus insurance — under about 15–20% of your take-home pay, and to choose a loan term of no more than five years to avoid prolonged negative equity. Affordability also depends on your other debts and your down payment. The payment this calculator produces is the starting point; add insurance, fuel, and maintenance to see the full monthly burden. A larger down payment and a shorter term keep you on the safe side. If the comfortable payment points to a cheaper car, that is usually the wiser choice than stretching the term to afford a pricier one.
What is negative equity and how do I avoid it?
Negative equity, or being 'underwater,' means you owe more on the loan than the car is worth, which happens because vehicles depreciate faster than a long loan pays down principal. It is risky because if the car is totaled or you want to sell, you must cover the gap out of pocket. You avoid it by making a sufficient down payment, choosing a shorter term, and not rolling old loan balances into a new one. New cars depreciate most steeply in the first year, so a small down payment on a long loan almost guarantees a period underwater. A down payment around 20% and a term of four to five years usually keeps you in positive equity.
Should I take dealer financing or get my own loan?
It depends on the offers. Dealers sometimes provide attractive promotional rates, including 0% financing on select models, which can beat outside lenders. Other times the dealer marks up the rate from the lender, so a pre-approved loan from your bank or credit union is cheaper. The best approach is to secure a pre-approval first, then let the dealer try to beat it — this gives you a benchmark and negotiating leverage. Always compare the total cost and APR, not just the monthly payment, since dealers can lower the payment by lengthening the term. Bringing your own financing keeps the price and the loan as separate negotiations.
When should I NOT rely on this calculator?
Avoid it as your final number when sales tax and fees are significant, since it excludes them and will understate your real payment — use a tax-inclusive tool or add them manually. It assumes a fixed rate for the full term, so it does not fit promotional teaser rates that change or variable-rate financing. It also does not account for rebates, manufacturer incentives, or lease structures, which work differently from a purchase loan. And it does not judge overall affordability or include ownership costs like insurance and maintenance. Use it for a quick estimate of the base loan payment and confirm the complete figure on the dealer's finance contract.