Auto Loan Calculator
Calculate a car loan's monthly payment and total interest from the price, down payment, trade-in, sales tax, rate, and term — the true cost, not just the payment.
كيفية استخدام هذه الحاسبة
- 1Enter the vehicle price, your down payment, and any trade-in value.
- 2Enter your local sales tax rate and the loan's APR.
- 3Enter the loan term in months.
- 4Read the monthly payment, but focus on the total interest and amount financed.
طريقة الحساب
Auto loan
amount financed = price + sales tax − down − trade-in sales tax = (price − trade-in) × tax rate payment = P·i ÷ (1 − (1+i)⁻ⁿ), i = APR ÷ 12 total interest = payment × months − amount financed
A car loan is a standard amortising loan, but the amount actually financed is often larger than buyers expect because sales tax is added and rolled into the loan. The financed amount starts from the vehicle price, adds the sales tax (usually charged on the price minus any trade-in), and subtracts the down payment and trade-in value. That balance is then repaid in equal monthly instalments over the term, with each payment covering interest on the outstanding balance plus a bit of principal. The monthly payment follows the usual amortisation formula, and the total interest is simply the sum of all payments minus the amount borrowed. Because interest accrues over the whole term, a longer loan lowers the monthly payment but raises the total interest, sometimes dramatically.
مثال محلول
A $30,000 car with $3,000 down and a $2,000 trade-in, plus 7% sales tax on the $28,000 taxable amount ($1,960), finances $26,960. At 6% over 60 months that is about $521 a month, and roughly $4,300 in total interest — money the headline price never mentioned.
Auto Loan Calculator: الدليل الكامل
Why the monthly payment is a trap
The single most important habit when financing a car is to stop negotiating on the monthly payment. Dealers routinely steer the conversation toward 'what can you afford per month?' because the payment is easy to manipulate without changing the price in your favour. The same car at the same price can be made to fit almost any monthly budget simply by stretching the loan term — and every extra month is another month of interest. A payment that looks comfortable can hide thousands in extra financing cost.
The numbers that actually matter are the vehicle price you negotiate, the interest rate, and the total interest you will pay over the life of the loan. Two loans with the same monthly payment can differ enormously in total cost if one runs 48 months and the other 72. Focusing on the total cost of the car — price plus all interest — keeps the decision honest and prevents the common outcome of paying far more than the sticker price without ever quite realising it.
How long a loan should you take?
Loan terms for cars have crept longer over the years, from the traditional three or four years to six, seven, and even eight. Longer terms make expensive vehicles appear affordable by shrinking the monthly payment, which is precisely why they have become popular — and precisely why they are dangerous. Beyond the extra interest, long loans create the problem of negative equity: because cars depreciate faster than a long loan is paid down, you can owe more than the car is worth for years, leaving you trapped if you need to sell or if the car is written off.
A useful guideline is to keep the term short enough that you build equity faster than the car loses value, generally no more than about 60 months for a new car and less for a used one. If the only way to afford a car is to stretch the loan to seven years, that is usually a sign the car is too expensive rather than a reason to take the longer loan. A larger down payment shortens the effective borrowing and reduces the negative-equity window, which is why the size of the down payment matters as much as the rate.
Taxes, trade-ins, and the total picture
Sales tax on a car is significant and often financed along with the vehicle, quietly adding to the amount you pay interest on. In most jurisdictions the tax is charged on the price after deducting a trade-in, which creates a genuine tax advantage to trading a car in at the dealer rather than selling it privately — the reduction in taxable amount can offset a lower trade-in offer. Whether that advantage outweighs the usually higher price a private sale fetches depends on your local tax rate and the gap between the offers.
Beyond tax, remember that the loan is only part of a car's true cost. Insurance, fuel, maintenance, registration, and depreciation all continue for as long as you own the vehicle, and a cheaper car with a slightly higher rate can easily cost less overall than an expensive one financed at a low promotional rate. The calculator focuses on the financing, which is the part most easily obscured at the dealership, but a sound decision weighs the monthly payment against the whole cost of ownership, not just the loan.
الأسئلة الشائعة
How is a car loan payment calculated?
The amount financed — price plus sales tax, minus down payment and trade-in — is repaid in equal monthly instalments using the amortisation formula, at the loan's APR over its term. A $26,960 loan at 6% over 60 months is about $521 a month, with roughly $4,300 in total interest.
Should I focus on the monthly payment?
No — that's the number dealers manipulate. A lower payment often just means a longer term and far more total interest. Negotiate the vehicle price, then look at the total interest and total cost of the car. Two loans with the same payment can differ by thousands overall.
Does a trade-in reduce my sales tax?
In most US states, yes — sales tax is charged on the price after subtracting the trade-in value, so trading in lowers the taxable amount. This can make trading in at the dealer more tax-efficient than selling privately, though a private sale may still fetch a higher price.
How long should my car loan be?
Generally no longer than 60 months for a new car, and less for a used one. Longer loans lower the payment but pile on interest and leave you owing more than the car is worth for years, since cars depreciate faster than a long loan pays down. A bigger down payment helps.