Estimate your monthly auto loan payment after down payment, trade-in value, and sales tax.
Frequently Asked Questions
How does trade-in value affect my car loan?
Your trade-in value is subtracted from the vehicle price (and typically from the taxable amount too), directly reducing the amount you need to finance.
Is sales tax included in the loan amount?
Many buyers finance sales tax along with the vehicle price. This calculator adds tax to the amount financed after subtracting your trade-in and down payment.
How can I lower my monthly car payment?
Increase your down payment, choose a longer loan term, negotiate a lower vehicle price, or shop for a lower interest rate — though a longer term usually increases total interest paid.
How car loan payments are calculated
This calculator first works out the amount you actually need to finance: vehicle price plus sales tax, minus your down payment and trade-in value. That financed amount is then run through the standard loan amortization formula using your interest rate and loan term to produce a monthly payment.
How to use this car loan calculator
- Enter the vehicle price and your down payment.
- Enter your trade-in value, if any.
- Enter your local sales tax rate, interest rate, and loan term.
- Click Calculate to see your amount financed, monthly payment, and total interest.
Tip: A larger down payment or trade-in reduces both your monthly payment and the total interest you pay.
New vs. used car loans
New car loans typically carry lower interest rates than used car loans, since new vehicles are seen as lower risk collateral and often qualify for manufacturer-subsidized financing. Used car loans usually run a percentage point or two higher, and the gap widens further for older or higher-mileage vehicles.
Factors that affect your auto loan rate
- Credit score: The single biggest factor in the rate you’re offered.
- Loan term: Auto loans commonly range from 36 to 84 months — longer terms lower the payment but increase total interest and raise the risk of being „underwater“ (owing more than the car is worth).
- Down payment size: A larger down payment reduces the amount financed and can improve your approval odds.
- New vs. used, and vehicle age: Older vehicles often carry higher rates and shorter maximum terms.
Tips for a better car loan deal
Get pre-approved by a bank or credit union before visiting the dealership — this gives you a rate benchmark and negotiating leverage against dealer financing. Avoid stretching the loan term purely to lower the monthly payment, since it usually costs more in total interest and increases negative equity risk. Trading in an existing vehicle or increasing your down payment are the most reliable ways to shrink your monthly payment without extending the term.
Expert insight: the new-vs-used calculus has shifted
Financial planners have traditionally pointed buyers toward a car that’s 1-3 years old as the value sweet spot, but with used car prices still elevated well above pre-2020 levels, several 2026 buyer guides note the gap between new and used financing has narrowed enough that a new vehicle can sometimes be the better deal once financing costs are factored in. The consistent advice across planners: keep the loan term between 36 and 60 months, since stretching to 72-84 months to lower the payment often traps buyers in negative equity, and aim for 10-20% down — closer to 20% on a new car to offset the steepest early depreciation.
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Disclaimer: This calculator is provided for general informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. Results are estimates based on the values you enter and should not be relied upon as the sole basis for any financial or other decision. Past performance and projected figures are not a guarantee of future results. Always consult a qualified professional before making financial decisions. See our Legal Notice and Privacy Policy for more information.