How to use the car loan calculator
- Enter the agreed vehicle price, before any rebates you plan to take as a down payment.
- Add your cash down payment and the dealer’s offer for your trade-in. If you still owe money on the trade-in, enter that balance too.
- Type the APR from your lender or the dealer’s finance office, and pick a term.
- Set your sales tax rate and the fees for title, registration and documents.
- Choose whether tax and fees are paid upfront or added to the loan. The payment, total interest and term comparison update immediately.
How the amount financed and payment are calculated
The loan is what is left after your trade-in and cash cover part of the bill:
Worked example
A $35,000 car with a $5,000 trade-in leaves $30,000 taxable. At 7%, sales tax is $2,100. Add $500 in fees, subtract the trade-in and a $3,000 down payment, and you finance $29,600.00.
At 6.9% APR over 60 months, r = 0.00575 and the payment is $584.72. Over five years you pay $5,483.14 in interest.
What stretching the term does
Keeping the same $29,600 loan and 6.9% rate, here is how the term changes the deal:
| Term | Monthly payment | Total interest |
|---|---|---|
| 36 months | $912.61 | $3,253.91 |
| 48 months | $707.44 | $4,356.96 |
| 60 months | $584.72 | $5,483.14 |
| 72 months | $503.23 | $6,632.60 |
| 84 months | $445.30 | $7,804.98 |
Going from 60 to 84 months saves about $139 a month but adds $2,321.84 of interest. Lenders also tend to charge a higher APR on longer terms, so the real gap is usually wider. A long loan also raises the chance that you owe more than the car is worth when you want to sell it.
Key features
- Handles trade-in credit, negative equity and fees in one place.
- Switch between financing tax and fees or paying them at signing.
- Side-by-side term comparison for 24 to 84 months.
- Shows the full cost of the car, including the trade-in value you hand over.
Practical use cases
In the US, most states charge sales tax only on the price minus your trade-in, which can be worth several hundred dollars. A few, including California, tax the full price. Untick the trade-in credit box if that applies to you.
In Canada, GST or HST plus any provincial sales tax apply to the vehicle, and most provinces reduce the taxable amount by a dealer trade-in. Enter the combined rate for your province.
In the UK, VAT is already included in a dealer’s price, so set the tax rate to zero. This calculator models a standard loan or hire purchase (HP) agreement. Personal contract purchase (PCP) deals end with a large optional balloon payment and need a different calculation.