Auto Loan Calculator
Monthly payment
$561.06
- Amount financed$28,000
- Total interest$5,664
- Total of payments$33,664
This prices the borrowing, not the car, and it is not a financing offer. Nothing here tracks what the vehicle is worth: a car loses value faster than the early years of a long loan pay it down, so for much of a six or seven year term you can owe more than it would sell for. Title, registration and documentation fees are left out, and so are the extras sold at the same desk — gap cover, an extended warranty, paint protection — which are commonly financed into the loan and would raise the vehicle price above. Insurance, fuel and repairs are separate again, and they are usually what decides whether a payment is affordable.
Assumes a fixed rate and equal monthly payments. Fees, insurance and any dealer add-ons are not included.
The worked examples below are in US dollars. The tool itself works in whichever currency you pick above, and never converts between them — what you type is what it does the arithmetic on.
Working out the real cost of a car
The price on the windscreen is not the amount you finance. Sales tax is added, a trade-in and a deposit are subtracted, and the figure that gets amortized is what remains. Dealers negotiate in monthly payments precisely because that figure is easy to move without changing what the car costs — stretch the term and the payment falls while the total rises.
This calculator starts from the vehicle price and shows both numbers: the monthly payment, and the total interest that payment adds up to.
A worked example: a $32,000 car
Take a $32,000 vehicle, a $6,000 trade-in, $4,000 down and 6% sales tax, financed at 7.5% over five years. Most states tax the price after the trade-in is deducted, so tax is charged on $26,000, not $32,000: that is $1,560. The amount financed is $32,000 + $1,560 − $4,000 − $6,000 = $23,560.
The payment is $472.09 a month. Over 60 months you pay $28,325.64 in total, of which $4,765.64 is interest — 20 cents of interest for every dollar financed.
That trade-in tax credit is worth having. In a state that taxes the full price instead, tax on $32,000 is $1,920, the amount financed becomes $23,920, and the payment rises to $479.31 with $4,838.46 of interest. The credit is worth $360 up front, which is exactly 6% of the trade-in.
What the term does to the total
Loan length is the lever that changes the payment most and the price least. On the same $23,560 at 7.5%:
- Over 48 months the payment is $569.65 and total interest is $3,783.44.
- Over 60 months it is $472.09 a month and $4,765.64 of interest.
- Over 72 months it is $407.36 a month and $5,769.56 of interest.
Going from four years to six drops the payment by $162 and adds nearly $2,000 to the cost. It also extends the period during which you owe more than the car is worth, because a car depreciates fastest in its first two or three years while the loan balance falls slowly at the start.
The term also sets how long you owe more than the car is worth
A longer loan does something the monthly payment hides: it slows how fast the balance falls, and the balance is what has to be settled if the car is written off, stolen or traded before the end. On the same $23,560 at 7.5%, this is what is still outstanding at each anniversary.
| Term | After 1 year | After 2 years | After 3 years |
|---|---|---|---|
| 48 months | $18,313 | $12,659 | $6,566 |
| 60 months | $19,525 | $15,177 | $10,491 |
| 72 months | $20,329 | $16,848 | $13,096 |
Two years in, the six-year buyer owes $4,188 more than the four-year buyer on an identical car worth an identical amount. Whether that is negative equity depends on what the car is actually worth, which this page does not guess at and no calculator honestly can. What the table does settle is that the size of the exposure is chosen on the day the term is signed rather than discovered two years later.
What is not included
The calculation covers principal and interest only. Not included: registration and title fees, documentation or dealer fees, extended warranties, GAP insurance, and the ordinary running costs of insurance, fuel, tyres and servicing that arrive whether the loan is paid or not.
It also assumes a simple-interest loan with a fixed rate and equal monthly payments, which is how nearly all US auto finance now works. Manufacturer subsidised rates, cashback offers taken instead of a low rate, and dealer rate markup are all real and none of them are modelled — the honest comparison is to run the calculator once for each offer, using the rate and the price each one actually gives you.
Cashback, trade-ins and the dealer’s lower figure
Is sales tax really charged on the amount after the trade-in?
In most US states, yes — the trade-in reduces the taxable price, which is a genuine saving worth the tax rate times the trade-in value. A minority of states, including California and Virginia, tax the full purchase price regardless. Set the tax field to match your state and check the taxable base on the buyer’s order.
Should I take the cashback or the low APR?
Run both. Cashback reduces the amount financed at the standard rate; the subsidised APR reduces the interest on a larger balance. On short terms the cashback usually wins, on long terms the low rate does — but the crossover depends on the numbers in front of you, not on a rule.
What happens if I trade the car in before the loan is paid off?
The dealer settles the outstanding balance out of what the car is worth. If the balance is the larger of the two, the shortfall is real money you have to produce, and the standard offer is to roll it into the next loan — which starts charging interest again on a car you no longer own. The table above is how you see that coming.
Is 0% finance actually free?
Only when it is offered on the same price as a cash purchase. The common structure asks you to give up a cashback amount in order to take it, and that forfeited cash is the loan’s real cost. Spread it over the term, compare it with what a bank would charge on the discounted price, and take whichever is smaller.
Why is the dealer’s monthly payment lower than this one?
Usually a longer term, a rate that assumes credit you have not been approved for yet, or fees rolled into the balance and quietly financed. Ask for the amount financed, the rate and the number of payments, then reproduce them here.
Does a bigger deposit lower the rate?
Not directly, but it can. A larger deposit reduces the lender’s exposure relative to the car’s value, which sometimes moves you into a better rate tier, and it always reduces the interest by reducing the balance it is charged on.