Auto Loan Calculator

What this auto loan calculator does

This calculator estimates the monthly payment and total cost of financing a vehicle. It accounts for the vehicle price, down payment, trade-in value, amount still owed on the trade-in, cash incentives, sales tax, and title or registration fees.

Standard and Monthly Payments modes

• Standard: enter the vehicle price and the calculator estimates the monthly payment.
• Monthly Payments: enter the monthly payment you can afford and the calculator estimates the vehicle price and loan details.

Both modes use the same loan term, interest rate, tax rate, and fee assumptions.

How to use this calculator

1. Choose Standard or Monthly Payments.
2. Enter the vehicle price or the monthly payment.
3. Enter the loan term in months and the annual interest rate.
4. Add any cash incentive, down payment, trade-in value, and amount owed on the trade-in.
5. Enter the sales tax rate and title or registration fees.
6. Choose whether taxes and fees are included in the loan.
7. Click Calculate to see the payment, total cost, and amortization schedule.

Auto loan payment formula

For a fixed-rate loan paid monthly, the payment is:

M = P × r × (1 + r)^n / ((1 + r)^n − 1)

P is the loan amount, r is the monthly interest rate, and n is the number of monthly payments. For a zero-interest loan, the monthly payment is simply P / n.

In Monthly Payments mode, the loan amount is the present value of the monthly payment:

P = M × (1 − (1 + r)^-n) / r

The calculator then solves for the vehicle price using the tax, trade-in, down payment, incentive, and fee assumptions.

Sales tax, trade-in, incentives, and fees

• Sales tax: calculated on the vehicle price minus the trade-in value. A trade-in can reduce the taxable amount.
• Amount owed on a trade-in: if the remaining loan balance is higher than the trade-in value, the difference increases the amount financed.
• Cash incentives: reduce the vehicle price used for financing and the total cost. In this calculator, they do not reduce the sales tax.
• Title and registration fees: added to the upfront payment or financed when "Include taxes and fees in loan" is selected.
• Upfront payment: when taxes and fees are not financed, it includes the down payment, sales tax, and fees. When they are financed, the upfront payment is the down payment.

What the results include

• Monthly payment: the estimated payment for the loan term.
• Total loan amount: the amount financed after the down payment, trade-in equity, and cash incentive.
• Sales tax: the tax amount used in the calculation.
• Upfront payment: the amount paid at signing.
• Total loan payments: all scheduled payments over the term.
• Total loan interest: the cost of borrowing.
• Total cost: vehicle price minus cash incentive, plus interest, sales tax, and fees.
• Amortization schedule: annual and monthly principal, interest, and remaining balance.

Frequently asked questions

What is the difference between Standard and Monthly Payments?

Standard starts with the vehicle price and estimates the monthly payment. Monthly Payments starts with a target monthly payment and estimates the vehicle price you can afford.

Does a trade-in reduce sales tax?

In this calculator, yes. Sales tax is calculated on the vehicle price minus the trade-in value. State and local rules can differ, so confirm the taxable amount with your dealer or state tax agency.

Should I include taxes and fees in the loan?

Financing taxes and fees increases the loan amount and the total interest paid. Paying them upfront costs more at signing but reduces the amount financed. Compare both options before choosing.

Do cash incentives reduce sales tax?

In this calculator, cash incentives reduce the amount financed and the total cost, but they do not reduce the sales tax. Tax treatment of manufacturer rebates varies by state.

Source

References:

• Consumer Financial Protection Bureau — Auto Loans
• Federal Trade Commission — Buying a Used Car

Disclaimer

This calculator is for informational and planning purposes only. It is not a loan offer, financial advice, or a guarantee of financing terms. Sales tax, fees, rebate treatment, and loan terms vary by state and lender. Confirm all figures with a qualified lender or financial professional.