How to use this calculator
- Vehicle price: the negotiated selling price, before taxes and fees.
- Down payment and rebates & incentives: cash you put down and any manufacturer or dealer rebates applied to the deal.
- Trade-in value and owed on trade-in: what the dealer gives you for your current car and what you still owe on its loan. If you owe more than it’s worth, the difference is added to the new loan.
- Sales tax rate: your combined state and local rate. Fees: title, registration and the dealer’s documentation fee.
- Interest rate and loan term: the APR and the number of months from your loan offer.
- Under Tax, fees & start date, choose whether sales tax applies to the full price or to the price minus your trade-in, and whether taxes and fees are paid upfront or added to the loan.
You get the monthly payment, the amount financed, the total interest and the total cost of the car. A chart and table show how the same deal looks over 36, 48, 60, 72 and 84 months.
How the amount financed is worked out
The loan covers whatever the down payment, trade-in and rebates don’t:
The monthly payment then follows the standard amortization formula, where r is the APR ÷ 12 and n is the number of months:
Worked example
You buy a $35,000 car with $4,000 down and a trade-in worth $6,000 that’s paid off. Sales tax is 6%, fees are $800, and the loan is 7% APR for 60 months.
- Taxable price after the trade-in credit: $35,000 − $6,000 = $29,000
- Sales tax: 6% × $29,000 = $1,740
- Amount financed: $35,000 + $1,740 + $800 − $4,000 − $6,000 = $27,540
- Monthly payment: $545.33
- Total interest over 60 months: $5,179
- Total cost of the car (price + tax + fees + interest): $42,719
If your state taxes the full price instead, the tax rises to $2,100, and the payment to $552.45.
Sales tax and your trade-in
How your trade-in is taxed can make a difference of several hundred dollars:
- Many states tax only the difference. Texas, for example, lets you deduct the trade-in’s value from the selling price and charges tax on the rest. A $25,000 car with a $10,000 trade-in is taxed on $15,000. Texas bases the credit on the value of the vehicle you trade in, not your equity in it, so it doesn’t matter whether you still owe money on it.
- Some states tax the full price. In California, the agreed trade-in allowance stays in the taxable amount, so you pay tax as if there were no trade-in.
- Rules change and have exceptions, for leases, private sales, rebates and dealer fees. We haven’t built in a state-by-state table. Set the switch to match your state, and check your state’s revenue or motor vehicle agency for the details.
Payments by loan term
For the example above ($27,540 financed at 7%), here’s what each common term costs. The rate is held the same for every term, but in practice longer terms often carry higher rates.
| Term | Monthly payment | Total interest | Total cost |
|---|---|---|---|
| 36 months | $850.36 | $3,073 | $40,613 |
| 48 months | $659.48 | $4,115 | $41,655 |
| 60 months | $545.33 | $5,179 | $42,719 |
| 72 months | $469.53 | $6,266 | $43,806 |
| 84 months | $415.65 | $7,375 | $44,915 |
Going from 60 to 84 months lowers the payment by about $130 but adds about $2,195 in interest. A longer loan also pays the balance down more slowly, so you’re more likely to owe more than the car is worth if you sell or trade it early.
Interest rate makes a big difference too
On the same $27,540 over 60 months:
| APR | Monthly payment | Total interest |
|---|---|---|
| 5% | $519.71 | $3,643 |
| 7% | $545.33 | $5,179 |
| 9% | $571.69 | $6,761 |
| 12% | $612.61 | $9,217 |
Getting preapproved by a bank or credit union before you visit the dealer gives you a rate to compare against dealer financing.
Tips before you sign
- Negotiate the price first, then the financing, then the trade-in, as separate conversations.
- Watch for negative equity. If you owe $9,000 on a trade-in worth $6,000, the extra $3,000 goes into the new loan. In our example that raises the payment to $723.54 and the total interest to $6,872.
- Pay taxes and fees upfront if you can. Paying the $2,540 in cash in our example lowers the payment to $495.03 and saves about $478 in interest.
- Keep the whole budget in view. Insurance, fuel and maintenance come on top of the payment. Our paycheck calculator shows your take-home pay, and the debt-to-income ratio calculator shows how a new payment affects what lenders see.
For a loan without the car-specific details, use the general loan calculator.
Assumptions and limitations
Sales tax is charged on the price before rebates. Fees aren’t taxed, and interest accrues monthly at APR ÷ 12. The calculator doesn’t include add-ons such as extended warranties, GAP coverage or service contracts. If you finance them, they increase the amount financed. It also doesn’t model leases, dealer-specific fee rules or state-specific taxes beyond the single rate you enter.
Sources
- Texas Comptroller of Public Accounts, Motor Vehicle Tax Guide: Trade-Ins
- California Department of Tax and Fee Administration, Sales and Use Tax Annotation 140.0500: Underallowance on Trade-Ins, Automobiles
This calculator gives estimates for general information. Your dealer’s or lender’s contract shows the exact figures.
Frequently asked questions
How do I calculate a car payment?
Start with the amount financed, which is the price plus any taxes and fees you roll into the loan, minus your down payment, trade-in value and rebates, plus anything you still owe on the trade-in. Then apply the standard loan payment formula with your APR and term in months. A $27,540 loan at 7% for 60 months comes to $545.33 a month.
Is sales tax charged before or after the trade-in?
It depends on your state. Many states, such as Texas, charge tax only on the price after subtracting the trade-in's value. Others, such as California, charge tax on the full price. Use the "Sales tax is charged on" switch to match your state, and check with your state's tax or motor vehicle agency if you're unsure.
What happens if I owe more on my trade-in than it's worth?
That gap is called negative equity. The dealer pays off your old loan, and the shortfall is usually added to the new loan, so you pay interest on it for years. In our example, owing $9,000 on a $6,000 trade-in adds $3,000 to the loan and raises the 60-month payment from $545 to $724.
Is a 72- or 84-month car loan a good idea?
Longer terms lower the payment but raise the total interest, and they make it more likely you'll owe more than the car is worth for a long time. On $27,540 at 7%, an 84-month loan costs about $2,195 more in interest than a 60-month loan at the same rate, and lenders often charge a higher rate for longer terms as well.
Should I put taxes and fees in the loan or pay them upfront?
Paying them upfront means you don't pay interest on them. In the example on this page, paying $2,540 of tax and fees in cash lowers the payment by about $50 a month and saves about $478 in interest over 60 months. Rolling them in keeps more cash in your pocket today.
Are dealer rebates taxed?
Treatment varies by state and by the type of rebate. This calculator charges sales tax on the price before rebates and subtracts rebates from the amount you finance, which is the more conservative assumption. If your state taxes the price after a rebate, your tax will be a little lower.
Updated November 2026. Results are estimates for educational purposes and depend on the inputs you provide.