Auto Loan Calculator
Get your real monthly car payment — including sales tax, trade-in and down payment, not just the sticker price. Total interest, payoff date, and a 36-to-72-month comparison update instantly. The formula is shown so you can check every number. No sign-up.
Quick answer
A $35,000 car with $5,000 down, 6% sales tax and a 7.5% rate means borrowing $32,100. Over 60 months that is $643.22 a month and $6,493 in interest — a total of $38,593 for a $35,000 car. Change the inputs above and this answer updates with your own numbers.
36 vs 48 vs 60 vs 72 months — the real cost of a longer term
Same amount financed and rate. Stretching the term shrinks the payment but grows the interest.
| Term | Monthly | Total interest | Total paid |
|---|
You borrow more than the sticker price
The most common surprise in car finance is that the loan is bigger than the car. Sales tax, title and registration are usually rolled into the amount financed, so a $35,000 car with $5,000 down does not produce a $30,000 loan — at 6% tax it produces a loan of $32,100.
That gap matters twice: you pay interest on the tax as well as the car, and you start further from the point where the loan is worth less than the vehicle. A trade-in works in the opposite direction, reducing the amount financed dollar for dollar.
36, 48, 60 or 72 months — the trade you are actually making
Dealers negotiate in monthly payments because almost any payment can be reached by stretching the term. Here is what that costs, on the same $32,100 loan at 7.5%:
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 36 months | $998.51 | $3,846 | $35,946 |
| 48 months | $776.14 | $5,155 | $37,255 |
| 60 months | $643.22 | $6,493 | $38,593 |
| 72 months | $555.01 | $7,861 | $39,961 |
Going from 36 to 72 months cuts the payment by $443 a month, a 44% reduction that feels like a discount. It is not one. Interest more than doubles, from $3,846 to $7,861, and the total paid rises by $4,015.
This is the central trick of car finance: the number being negotiated is the payment, while the number that actually costs you money is the total. They move in opposite directions.
The long-term risk nobody mentions
A car loses value quickly, especially in the first two or three years, while a long loan pays down the balance slowly. Stretch the term far enough and the two curves cross: you owe more than the car is worth, which is called being underwater or upside down.
It is a problem the moment anything interrupts the plan. If the car is written off, insurance pays what it was worth, not what you owe. If you need to sell, you have to find the difference in cash. And if you trade it in, dealers will happily roll the shortfall into the next loan, which starts the next car underwater on day one.
A larger deposit and a shorter term both push the crossover point away. That is the practical reason to care about the table above beyond the interest saved.
What the rate does
On the same 60-month, $32,100 loan, moving the rate changes the picture substantially:
| Rate | Monthly payment | Total interest |
|---|---|---|
| 4% | $591.17 | $3,370 |
| 6% | $620.58 | $5,135 |
| 7.5% | $643.22 | $6,493 |
| 9% | $666.34 | $7,881 |
| 12% | $714.05 | $10,743 |
Between 4% and 12% the payment rises by $123 a month, but the interest more than triples. Arranging your own financing before you walk in — from a bank or credit union — turns the rate into something you bring with you rather than something you are handed.
The auto loan formula
- M — monthly payment
- P — amount financed: price + tax − deposit − trade-in
- r — monthly rate, the annual rate divided by 12
- n — number of monthly payments
It is the same amortization formula a mortgage uses. The only thing that makes car finance different in practice is how much of the negotiation happens in the P and the n rather than the r.
See the formula with your own numbers
These update live from the calculator inputs above.
Example: the $35,000 car
$35,000 price, $5,000 down, no trade-in, 6% sales tax, 7.5% APR over 60 months.
- Amount financed: $32,100 — the car minus the deposit, plus $2,100 of tax.
- Monthly payment: $643.22.
- Total interest: $6,493, and $38,593 paid in all.
Shorten the same deal to 36 months and the payment rises to $998.51 while the total falls to $35,946 — $2,647 saved. Whether that is worth $355 a month is a budgeting question, not a maths question, and it is the actual decision in front of you.
Frequently asked questions
Does this include sales tax?
Yes. Enter your local rate and the calculator adds the tax to the amount financed, which is how most dealers structure it. On a $35,000 car at 6% that is $2,100 added to the loan — money you then pay interest on for the life of the term.
Is a longer car loan a bad idea?
It lowers the payment and raises the cost. On a $32,100 loan at 7.5%, stretching from 36 to 72 months saves $443 a month and costs $4,015 more in interest. The bigger risk is being underwater: long loans pay down slowly while the car depreciates quickly, so for years you can owe more than it is worth.
What does being underwater on a car loan mean?
You owe more than the car is worth. It matters if the car is written off, because insurance pays market value rather than your balance, and it matters if you need to sell or trade, because you must cover the shortfall in cash or roll it into the next loan. A bigger deposit and a shorter term both shorten the period you spend in that position.
Should I take dealer financing or arrange my own?
Get your own quote first, from a bank or credit union, then let the dealer try to beat it. Dealer finance can genuinely be cheaper — manufacturer-subsidised rates exist — but you can only tell if you have a number to compare against. Walking in without one means negotiating on the payment, which is the dealer's home ground.
How much should I put down on a car?
There is no universal figure, but a larger deposit shrinks the loan, cuts the interest and shortens the time you spend underwater. Since tax is usually financed too, a deposit has to clear the tax before it starts reducing the car's own balance — which is one reason very small deposits do less than people expect.
Does a trade-in reduce what I borrow?
Yes, dollar for dollar against the amount financed, the same way a cash deposit does. The caution is a trade-in with negative equity: if you still owe more than it is worth, that shortfall is usually added to the new loan, and you start the next car already underwater.
Method & sources
- Calculation: Standard fixed-rate amortization (formula above). Tax applied to price after trade-in. Excludes dealer fees, registration and add-ons.
- Reviewed: · Assumptions reviewed quarterly.
Educational estimate, not financial advice. Confirm exact figures with your lender or dealer.
Run your own numbers
Enter the price, your deposit, the tax rate and the term, and see the real amount financed, the payment and what each term length costs in total interest.
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