Auto loan calculator
Take a $35,000 car with $5,000 down and 6% sales tax. Finance it at 6.35% APR for 60 months. It costs about $625.82 a month and $5,449 in total interest.
Amount financed $32,100 (includes $2,100 sales tax) · Total interest $5,449 · Total cost of the car $42,549
20/4/10 check: to keep this payment under 10% of gross pay you'd need about $75,098 a year.
How the car payment is calculated
First the calculator works out how much you actually borrow. Then it applies the same amortization formula lenders use.
Amount financed = price + sales tax + fees − down payment − trade-in
Payment = P × r ÷ (1 − (1 + r)^−n). P is the amount financed. r is the APR ÷ 12. n is the number of months.
- Sales tax: $35,000 × 6% = $2,100.
- Amount financed: $35,000 + $2,100 − $5,000 = $32,100.
- Monthly rate: 6.35% ÷ 12 = 0.5292% (0.005292).
- Payment over 60 months: $625.82. In month one, $169.86 goes to interest and $455.96 to principal.
- Total of payments: $625.82 × 60 = $37,549, so interest is $5,449.
Most states charge sales tax on the price minus your trade-in. A few tax the full price. California is one of them. Check your state's motor vehicle or revenue department. If your state gives no trade-in credit, uncheck the box above.
Same loan, different terms
A longer term lowers the payment. It also raises the interest. Here's the $32,100 example at 6.35%:
| Term | Monthly payment | Total interest |
|---|---|---|
| 36 months | $981.64 | $3,239 |
| 48 months | $759.03 | $4,333 |
| 60 months | $625.82 | $5,449 |
| 72 months | $537.31 | $6,586 |
| 84 months | $474.34 | $7,744 |
Going from 48 to 84 months cuts the payment by $285. But it adds $3,411 of interest. There's a second problem. On a long loan, you're more likely to owe more than the car is worth for the first few years.
What rate should I expect?
Experian, State of the Automotive Finance Market, Q2 2026 puts the average APR at 6.35% on new-car loans and 11.19% on used-car loans. Average amounts financed were $43,610 (new) and $27,852 (used). Average terms were near 70 months. Borrowers with the best credit averaged about 4.41% on new cars.
The Federal Reserve's G.19 release shows commercial banks charging about 7% to 7.5% on 60-month new-car loans in 2026. Your rate depends mostly on your credit score. The loan term matters too. So does new versus used.
The 20/4/10 rule
It's a common guideline. Put at least 20% down. Finance for no more than 4 years. Keep total car costs (payment, insurance, fuel) under 10% of gross income. In the example, the 48-month payment of $759 alone needs about $91,084 a year in gross income.
Car payment by loan amount
Frequently asked questions
Does the calculator include sales tax?
Yes. Enter your state and local rate. The tax is added to the amount you finance. In the example, 6% on a $35,000 car adds $2,100 to the loan.
Is a 72 or 84-month car loan a bad idea?
Not always. But it costs more. On the example loan, 84 months adds $3,411 of interest compared with 48 months. Long terms also often carry higher APRs.
Should I put more money down or take a shorter term?
Both lower your total interest. A bigger down payment lowers the payment. It also cuts the risk of owing more than the car is worth. A shorter term raises the payment, but it saves the most interest.
What fees can be rolled into a car loan?
Dealers often finance documentation fees, title and registration. They also finance add-ons like extended warranties or GAP coverage. Anything financed builds interest. So enter it in the fees field to see the real payment.
Does this include insurance and registration?
No. The payment covers the loan only. Budget separately for insurance, registration, fuel and maintenance.
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Updated: October 2, 2026 · Sources and methodology