Auto Loan Calculator

How it works

The amount you borrow is the vehicle price plus sales tax, less your down payment and the value of your trade-in. That is the amount financed.

The lender spreads that amount over the term in equal monthly payments, charging interest each month on what you still owe. The standard loan payment formula gives the payment that clears the balance exactly on the last month.

Total interest is everything you pay the lender beyond the amount financed. Total cost adds your down payment and trade-in back in, so it is the full price of owning the vehicle: tax, interest and all.

Formula

P = price × (1 + tax rate) − down payment − trade-in
r = APR ÷ 12 ÷ 100        n = months
M = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
M = P ÷ n                 when r = 0
total interest = M × n − P
total cost     = down payment + trade-in + M × n

Example

Financing $25,000 at 6% APR for 60 months gives a monthly rate of 0.5% and 60 payments. The formula gives a monthly payment of $483.32. Over five years that is $3,999.20 in interest, for a total cost of $28,999.20.

Add 7% sales tax to a $30,000 car and put $5,000 down with a $2,000 trade-in: the amount financed is $32,100 − $7,000 = $25,100. At the same 6% for 60 months the payment is $485.25, total interest $4,015.20, and the total cost of the car is $36,115.20.

Assumptions and limitations

• The APR is fixed for the whole term and the loan fully amortizes with equal monthly payments.
• Sales tax is applied to the full vehicle price. Some states tax the price net of the trade-in; check your state's rule and adjust the price if so.
• Lender fees, documentation fees, registration, title, extended warranties and GAP insurance are not included.
• The trade-in is treated as owned outright. If you still owe on it, subtract that balance from its value.
• Results are informational and educational, not financial advice. Check the figures on your lender's offer before signing.

Frequently asked questions