Auto Loan Calculator
Calculate the monthly payment on a car loan, factoring in sales tax, down payment, and a trade-in. Shows the true financed amount once tax is added and credits are subtracted.
Last updated: May 2026
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About this calculator
This calculator finds the monthly payment on an auto loan after accounting for sales tax and the money you put down. It first computes the amount actually financed: the car price multiplied by (1 + sales tax rate), minus the down payment and any trade-in value. Sales tax is added to the price because in most jurisdictions you finance the tax along with the vehicle, which many buyers overlook. It then applies the standard amortizing-loan formula to that financed amount: 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 term in years × 12). The result is your fixed monthly payment. The biggest drivers are the loan term and the rate: a longer term lowers the monthly payment but increases total interest and the risk of owing more than the car is worth, while a higher rate raises both. Edge cases: a large down payment or trade-in sharply reduces the financed amount and payment, and a 0% promotional rate makes the payment simply the financed amount divided by the number of months. The calculator does not include registration, dealer fees, gap insurance, or the cost of an extended warranty, all of which can add to the real cost, and it assumes a fixed rate for the full term.
How to use
Example 1 — a $35,000 car with $5,000 down, an $8,000 trade-in, 5.9% over 5 years, 8.5% sales tax. Enter Car Price = 35000, Down Payment = 5000, Trade Value = 8000, Loan Rate = 5.9, Loan Term = 60 months, Sales Tax = 8.5. The financed amount is 35000 × 1.085 − 5000 − 8000 = $24,975, giving a monthly payment of $481.68. Verify: the tax adds about $2,975 to the price before your credits are applied. Example 2 — a $28,000 car with $3,000 down, no trade-in, 6.9% over 6 years, 7% sales tax. Enter 28000, 3000, 0, 6.9, 72 months, 7. The payment is $458.35. Verify: the longer six-year term keeps the monthly payment low despite financing nearly the full taxed price, but you pay more total interest over the extra year.
Frequently asked questions
Is sales tax really included in the loan?
In most U.S. states, yes — sales tax on a vehicle is calculated on the purchase price and is typically rolled into the amount you finance rather than paid separately in cash. This calculator reflects that by adding the tax to the price before subtracting your down payment and trade-in. Many buyers forget this and are surprised that they finance more than the sticker price. A few states tax differently or offer a trade-in tax credit that reduces the taxable amount, so check your local rules. Either way, budgeting for tax up front prevents an unwelcome surprise at the dealership.
How does a longer loan term affect the cost?
A longer term spreads the loan over more payments, lowering the monthly amount but increasing the total interest you pay and the time you spend in debt. It also raises the risk of being 'underwater' — owing more than the car is worth — because vehicles depreciate faster than a long loan pays down principal. Six- and seven-year auto loans have become common precisely because they make expensive cars look affordable monthly, but they cost more overall. A shorter term costs more each month but saves interest and builds equity faster. Choose the shortest term whose payment you can comfortably afford.
Should I make a larger down payment?
A larger down payment reduces the financed amount, which lowers both your monthly payment and the total interest you pay, and it helps you avoid being underwater early in the loan. It can also improve your loan terms, since lenders view a bigger down payment as lower risk. The trade-off is tying up cash that could serve as an emergency fund or earn a return elsewhere. A common guideline is to put down enough that you are not underwater after the car's initial depreciation, often around 20% on a new car. Balance the interest savings against keeping adequate liquidity.
What costs does this calculator leave out?
It covers the financed price including sales tax, but several other costs apply when buying a car. Registration and title fees, dealer documentation fees, and any add-ons like gap insurance or an extended warranty are not included and can add hundreds or thousands of dollars. Ongoing costs — insurance, fuel, maintenance, and depreciation — are also excluded but matter enormously for affordability. If any fees are financed rather than paid in cash, your real loan and payment will be higher than shown. Add these items separately to understand the full cost of ownership, not just the loan payment.
When should I NOT rely on this calculator?
Avoid it for promotional or variable-rate financing that changes over the term, since it assumes a single fixed rate. It also does not capture manufacturer rebates, special lease structures, or dealer fees rolled into the loan, all of which alter the real payment. If your state offers a trade-in tax credit or taxes vehicles differently, the tax portion may not match your situation exactly. And it says nothing about whether the car is affordable given your total budget and other obligations — use a car-affordability tool for that. Treat the result as a solid estimate of the loan payment and confirm the exact figures on the dealer's finance contract.