Auto Loan Calculator

Method & sources

This calculator is educational, not advice. It estimates a monthly car payment from the numbers you enter; it is not a loan offer, a rate quote, or financial, tax or legal advice. Confirm any figure, including your state's sales tax and trade-in rules, with your lender or dealer before making a decision.

Formula

Taxable amount = Vehicle price - Trade-in value (floored at $0; trade-in value first offsets the taxable price, a credit most but not all U.S. states allow).

Sales tax = Taxable amount x Sales tax rate.

Loan amount (financed) L = Vehicle price + Sales tax + Additional fees - Down payment - Trade-in value (floored at $0).

Monthly interest rate r = Annual interest rate (APR) / 100 / 12.

Number of payments n = Loan term in years x 12.

Standard amortising payment: M = L x [r(1+r)^n] / [(1+r)^n - 1].

If r = 0 (a 0% promotional rate is a valid entry), M = L / n instead, to avoid dividing by zero.

Total paid over the loan = M x n. Total interest = Total paid - L.

Total cost of the vehicle = Vehicle price + Sales tax + Additional fees + Total interest (this restates the full price of ownership regardless of how much was covered by down payment or trade-in, so it does not subtract those two).

Rounding

Every dollar figure shown is rounded to the nearest cent for display only (toFixed(2)); the loan amount field itself is also stored rounded to 2 decimals mid-calculation (it is a visible, editable-looking readonly field), so the amortisation runs on that already-rounded principal rather than full floating-point precision - a difference of at most a fraction of a cent on the displayed results.

Inputs used

• Vehicle price (required, must be positive)
• Down payment (optional, defaults to $0)
• Trade-in value (optional, defaults to $0)
• Sales tax rate, % (optional, defaults to 0%)
• Additional fees (optional, defaults to $0; e.g. title, registration, doc fees)
• Interest rate (APR), 0-100% (required; 0% is accepted for promotional financing)
• Loan term: 3, 4, 5, 6 or 7 years (5 is pre-selected in the dropdown, not a value the user must accept)

What this does not account for

• GAP insurance, extended warranties, or other dealer add-ons rolled into the loan
• Negative equity rollover (still owing money on a trade-in vehicle) - the tool treats trade-in value as strictly non-negative and cannot subtract a shortfall
• State-by-state variation in the trade-in sales-tax credit - several states (commonly cited as California, Hawaii, Kentucky, Michigan and Virginia, with Maryland and Montana treated inconsistently across sources - Maryland's disallowance may be partial, and Montana charges no vehicle sales tax at all rather than disallowing a credit) do not allow trading in a vehicle to reduce the taxable purchase price, but the calculator always applies the credit. No single authoritative government list of these states was found this session, so treat the exact list as approximate, not verified.
• Precomputed (Rule of 78s) interest loans - the calculator only models simple-interest amortising loans
• Dealer-specific fees such as documentation or acquisition fees beyond the single 'Additional Fees' field, and any registration/title fees charged outside the loan
• Depreciation, vehicle value over time, or upside-down-loan risk
• Late fees, prepayment penalties, or lender-specific loan terms

Jurisdiction

United States. Sales tax and trade-in tax-credit treatment vary by state; the calculator applies a single user-entered flat sales tax rate and always credits trade-in value against the taxable amount, which is the majority convention but not universal (see exclusions).

Source

Consumer Financial Protection Bureau, "What is amortization and how could it affect my auto loan?"

Effective date

Not date-sensitive: the amortisation formula and simple-interest convention are stable, not a value that changes on a schedule.

Version

1.0

Last substantive review

2026-09-20

Limitations

• The sales tax and interest rate fields have no pre-filled default - only greyed-out placeholder examples (6% tax, 5.5% APR) that are cleared the moment you type, so there is nothing here that needs a changing-fact register entry.
• This calculator models simple interest calculated on the outstanding balance, the standard amortising structure CFPB describes for auto loans generally; it does not model precomputed (Rule of 78s) interest loans, which some subprime lenders still use. CFPB's amortisation page does not itself state what share of auto loans use each method, so that comparison is not attributed to CFPB.
• The trade-in sales-tax credit this tool always applies is the majority state convention, not a federal rule - seven states do not allow it, so users there will see a lower tax estimate than they will actually owe.
• This is a payment estimate, not a loan offer, pre-qualification, or Truth in Lending disclosure.

Reference cases

Five worked examples you can check by hand against the formula above.

Change log