Car Payment Calculator – Estimate Your Monthly Auto Loan Payment
Our car payment calculator helps you estimate your monthly auto loan payment before you step foot in a dealership. Simply enter the vehicle price, down payment, trade-in value, sales tax, interest rate, and loan term to see a full breakdown of your financing costs. Understanding your car payment in advance puts you in a stronger negotiating position and helps you stay within your budget.
The total purchase price of the vehicle before any down payment.
Amount you will pay upfront. A larger down payment reduces your loan amount.
Estimated value of your current vehicle if trading it in.
Your state or local sales tax rate applied to the vehicle purchase.
The annual percentage rate (APR) offered by your lender.
The number of months over which you will repay the loan.
Your results will appear here
How to Use This Calculator
1. Enter the full purchase price of the vehicle you are considering in the 'Vehicle Price' field. 2. Input any down payment amount you plan to pay upfront to reduce the loan. 3. If you have a trade-in vehicle, enter its estimated value in the 'Trade-In Value' field. 4. Enter your state or local sales tax rate as a percentage. 5. Input the annual interest rate (APR) you have been quoted or expect to qualify for. 6. Select your desired loan term in months from the dropdown menu. 7. Your monthly payment, total loan amount, total interest, and total cost will calculate automatically.
How Car Loan Payments Are Calculated
Auto loan payments are calculated using the standard amortizing loan formula. Each monthly payment covers both a portion of the principal (the amount you borrowed) and the interest that has accrued that month. In the early months of your loan, a larger share of each payment goes toward interest; over time, more goes toward principal.
The Monthly Payment Formula
The formula for a fixed monthly car payment is:
M = P × [r(1+r)^n] / [(1+r)^n – 1]
- M = Monthly payment
- P = Principal loan amount (vehicle price + tax – down payment – trade-in)
- r = Monthly interest rate (annual APR ÷ 12 ÷ 100)
- n = Total number of monthly payments (loan term in months)
What Is Included in the Loan Amount?
Your loan amount is calculated as: Vehicle Price + Sales Tax – Down Payment – Trade-In Value. Sales tax is added to the purchase price before subtracting credits, since most lenders finance the tax-inclusive amount.
Total Interest and Total Cost
Total interest paid equals your monthly payment multiplied by the number of months, minus the original loan principal. The total cost of the loan is simply the sum of all payments made over the life of the loan.
Tips to Lower Your Car Payment
- Increase your down payment: A larger down payment directly reduces the amount you need to borrow.
- Improve your credit score: Better credit qualifies you for lower interest rates, significantly reducing total costs.
- Choose a shorter loan term: While monthly payments are higher, you pay far less in total interest.
- Negotiate the vehicle price: Even small reductions in price compound favorably over the loan term.
- Shop multiple lenders: Banks, credit unions, and online lenders often offer better rates than dealership financing.