How the auto loan calculator works
This auto loan calculator turns a vehicle price, down payment, rate, and term into your monthly car payment, and folds in the things that actually change the number: trade-in equity, sales tax, and dealer fees. Switch to "what can I afford?" mode and it works backward from a monthly budget to the vehicle price you can shop for.
How to use it
- Enter the vehicle price and your down payment.
- Set the interest rate (APR) and the loan term.
- Open Advanced options to add a trade-in, sales tax, cash incentives, and fees.
The result updates as you type. Prepayments can be added to shorten the loan.
How the payment is calculated
The payment uses the standard loan amortization formula applied to the amount you actually finance, which accounts for the down payment, trade-in, incentives, and any taxes or fees rolled into the loan:
How much should you put down on a car?
A common guideline is 20% on a new car and 10% on a used one. A larger down payment:
- Lowers your monthly payment and total interest
- Reduces the risk of being "underwater" (owing more than the car is worth)
- May qualify you for a better interest rate
If you can only put down less than 10%, consider whether the vehicle fits your budget. Cars depreciate fastest in the first 1–2 years, and a small down payment means you may owe more than the car is worth for much of the loan.
Trade-in and negative equity
Enter your trade-in's value and any balance still owed on it (both under Advanced). If the car is worth more than you owe, the difference lowers the amount financed. If you owe more than it is worth, that negative equity rolls into the new loan and raises the payment.
Rolling negative equity into a new loan is one of the most expensive car-buying mistakes. You start the new loan already underwater, and the problem compounds with each trade-in cycle. If you are in this situation, consider paying down the existing loan before trading in, or choosing a less expensive vehicle.
Choosing the right loan term
Longer terms lower the monthly payment but increase total interest cost and depreciation risk:
A 72-month loan costs over twice the interest of a 36-month loan, and you will likely be underwater for the first 3–4 years. If a 48 or 60-month payment feels comfortable, that is usually the better trade-off between affordability and total cost.
Financing tax and fees, or paying upfront
The "finance tax & fees?" option decides whether sales tax and fees are added to the loan or paid at signing. Financing them means less cash upfront but a higher payment and more total interest. Paying upfront keeps the loan smaller. Toggle the option to compare both approaches.
What can I afford? mode
Switch to afford mode when you have a monthly budget and want the price to shop for. Enter the payment you are comfortable with, the rate, term, and down payment, and the calculator returns the vehicle price that fits.
Remember that the total cost of ownership includes insurance, fuel, maintenance, and registration — not just the loan payment. A common guideline is to keep total transportation costs (payment + insurance + fuel) below 15% of take-home pay.
For non-auto borrowing such as a mortgage, personal, or student loan, use the loan calculator. Figures assume a fixed APR and are estimates, not a financing offer.
Frequently asked questions
How much should I put down on a car?
A common guideline is 20% on new and 10% on used. A larger down payment lowers your monthly payment and total interest, and protects against being underwater as the car depreciates. If you can only manage less than 10%, consider whether the vehicle fits your budget.
Should I finance sales tax and fees or pay upfront?
Paying upfront keeps the loan smaller (less interest overall). Rolling them in lowers your cash-at-signing but raises the payment and total cost. Toggle the option in the calculator to compare both — the difference in total interest can be $500–$2,000 depending on the amount.
What is negative equity and why does it matter?
Negative equity means you owe more on your current car than it is worth. If you trade it in, that gap rolls into your new loan, making it larger and the payment higher. It is one of the most expensive car-buying mistakes because it compounds with each trade-in cycle.
Is a 72-month loan a bad idea?
It lowers the monthly payment but costs significantly more in total interest and keeps you underwater longer. On a $30,000 loan at 6.5%, 72 months costs over twice the interest of 36 months. If 48 or 60 months is affordable, that is usually the better trade-off.
Does this include the APR or just the rate?
Enter your loan's APR in the rate field to capture rate-based costs. Flat charges like documentation, title, and registration go in "Other fees" — they add to what you pay but don't compound as interest.
How much car can I actually afford?
A common guideline is to keep total transportation costs (payment + insurance + fuel + maintenance) below 15% of take-home pay. Use 'What can I afford?' mode to find the price that fits your monthly budget, then add insurance and running costs to check the full picture.