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Auto Loan Calculator

Free auto loan calculator: car payment with sales tax, trade-in and dealer fees. See monthly payment, total interest and a full payoff schedule. No sign-up.

Last reviewed: January 2026 · Tax data verified against IRS Publication 15-T & state revenue departments

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How This Calculator Works

A car loan has more moving parts than most people realize: the sticker price is only the starting point. This calculator builds your amount financed from five pieces — vehicle price, down payment, trade-in value, sales tax and dealer fees — because in most states the taxable price is what remains after your trade-in allowance is subtracted, and any fee you do not pay in cash gets rolled into the balance. Change any input and every number on the page updates instantly.

The payment itself comes from the standard fixed-rate annuity formula M = P x [r(1+r)^n] / [(1+r)^n - 1], where r is the APR divided by 12 and n is the number of monthly payments. On the default $35,000 car with $3,500 down, that is $31,500 financed at 6.5% APR for 60 months — a payment of $616.33, of which the first month sends $170.63 to interest and $445.71 to principal.

Term length is the lever most buyers get wrong. Keeping our $31,500 example at 6.5% APR: 60 months costs $616.33 per month and $5,480.02 in total interest; 72 months drops the payment to $529.51 but raises interest to $6,624.92; 84 months gets the payment to $467.76 and the interest bill to $7,791.61. Going from 60 to 84 months saves $148.58 per month but costs $2,311.59 more over the life of the loan — and stretches the period where you owe more than the car is worth.

Extra principal payments fight back hard. Adding just $50 per month to the default loan pays it off in 55 months instead of 60 and saves $492.99 in interest; $100 per month finishes in 51 months and saves $903.20. Because interest is charged on the remaining balance every single month, each skipped month at the end of the loan is interest you never pay. Check your contract for prepayment penalties first — most mainstream auto loans have none.

Watch for 0% APR offers, and do the arithmetic before signing. On $31,500 for 60 months, 0% financing means a $525.00 payment and zero interest, versus $616.33 and $5,480.02 at 6.5%. A cash rebate competes better than it looks, though, because it also shrinks the balance you pay interest on — on this deal the break-even rebate is about $4,675, not the full $5,480. Dealers fund those promotions by holding the price; negotiate price first, then choose the financing. For other loan shapes, see our loan calculator and amortization calculator.

How It's Calculated

Formula

M = P x [r(1+r)^n] / [(1+r)^n - 1] (r = APR / 12, n = term months)

Step-by-Step

  1. 1Compute the amount financed: P = price - down payment - trade-in + sales tax on (price - trade-in) + dealer fees.
  2. 2Convert the APR to a monthly rate: r = APR / 12 (6.5% APR gives r = 0.0054167).
  3. 3Count the payments: n = term in months (60 for a five-year loan).
  4. 4Apply the annuity formula M = P x [r(1+r)^n] / [(1+r)^n - 1] to get the level monthly payment.
  5. 5Month by month, interest = remaining balance x r and principal = payment - interest; repeat until the balance reaches zero.

Example

$35,000 car, $3,500 down, no trade-in, 0% sales tax, no fees, 6.5% APR, 60 months: P = $31,500, r = 0.0054167, n = 60. M = $616.33 per month. Total paid over the term is $36,980.02, of which $5,480.02 is interest — the car costs $40,480.02 including the down payment. Adding $100 per month finishes the loan in 51 months and saves $903.20 of interest.

For detailed data sources and full methodology, see our Methodology & Data Sources page.

Key Rates & Data for 2026

New-car APR, strong credit (typical 2026)

~5% - 9%

Used-car APR, strong credit (typical 2026)

~6% - 12%

Deep-subprime auto APR (typical 2026)

~13% - 20%+

Payment per $1,000 financed @ 6.5% / 60 mo

$19.57

Payment per $1,000 financed @ 9% / 60 mo

$20.76

Sales-tax base in most states

Price minus trade-in

Frequently Asked Questions

What is the monthly payment on a $35,000 car?

Financed the typical way — $3,500 down, no trade-in, 6.5% APR for 60 months — a $35,000 car means borrowing $31,500, which works out to $616.33 per month. Total interest over five years is $5,480.02, so once the down payment is counted the car effectively costs $40,480.02. Stretch the same loan to 72 months and the payment falls to $529.51, but interest climbs to $6,624.92; at 84 months you pay $467.76 per month and $7,791.61 total interest. Longer terms are easier on the monthly budget but consistently cost more overall, and they extend the stretch where you owe more than the depreciating car is worth.

How does a trade-in affect sales tax on a car?

In most states, sales tax is charged only on the difference between the new car's price and your trade-in allowance. On a $35,000 car with a $5,000 trade-in at an 8% tax rate, you pay tax on $30,000 — $2,400 instead of $2,800, keeping $400. That saving lowers your amount financed twice over: smaller taxable base and smaller balance to amortize. It is also why dealerships in high-tax states push trade-ins so hard. A handful of states handle vehicle taxes differently (annual property taxes, or no trade-in credit), so confirm your state's rule — our <a href="/sales-tax-calculator">sales tax calculator</a> shows state-level rates.

Is a 60-month or an 84-month auto loan better?

Mathematically, shorter always wins: on $31,500 at 6.5% APR, 60 months costs $5,480.02 in interest while 84 months costs $7,791.61 — a $2,311.59 difference for a $148.58 lower monthly payment. The real question is how long you will keep the car. Cars depreciate fastest in the first two to three years, so an 84-month loan leaves you 'underwater' (owing more than the car is worth) for years, which hurts if the car is totaled or stolen — gap insurance helps, but it costs extra too. A good rule: match the loan term to your expected ownership period, and pick the shortest payment you can genuinely afford.

Is 0% APR financing actually a good deal?

It can be — if you would otherwise borrow at a high rate. On $31,500 for 60 months, 0% APR gives a $525.00 payment and $0 interest, versus $616.33 and $5,480.02 at 6.5% APR. The catch: 0% offers usually replace a cash rebate, and they are typically reserved for strong credit at captive finance companies. Do the comparison honestly — if the alternative is a $3,000 rebate plus financing the remaining $28,500 at your bank's 6.5%, that loan costs $4,958.11 in interest, for a total out-of-pocket of $36,958.11 versus $35,000 with the 0% deal — so the 0% financing wins by about $1,958. The rebate only wins when it is big: on this deal the break-even rebate is roughly $4,675. If the rebate is small and your outside rate is high, 0% wins outright. Run both scenarios in the calculator before you sign.

How much should I put down on a car?

The classic guidance is 20% on a new car: $7,000 on a $35,000 purchase. That leaves $28,000 financed, which at 6.5% APR for 60 months is a $547.85 payment and $4,871.13 in total interest — versus $616.33 and $5,480.02 with only $3,500 down. The bigger down payment saves about $609 in interest, but the larger benefits are structural: you start the loan closer to the car's actual value, shrink the negative-equity window, and lower the chance of needing gap coverage. If cash is tight, prioritize at least 10% plus taxes and fees, so the financed balance never exceeds the car's first-day value.

How do extra payments change an auto loan?

Extra dollars skip interest entirely and retire principal. On the default $31,500 loan at 6.5% for 60 months: an extra $25 per month pays off in 58 months and saves $258.21; an extra $50 finishes in 55 months and saves $492.99; an extra $100 finishes in 51 months and saves $903.20. The earlier you start, the bigger the effect, because those extra dollars stop interest from compounding on every future balance. Two cautions: confirm the lender has no prepayment penalty, and make sure extra amounts are applied to principal rather than counted as an early next payment — that detail changes everything.

What APR should I expect on a car loan in 2026?

Typical 2026 ranges: roughly 5% - 9% for strong credit on a new car, 6% - 12% for strong credit on a used car, and 13% to 20%+ in deep-subprime tiers — your actual offer depends on the lender, loan-to-value and term. The spread matters enormously: on $31,500 for 60 months, 5% APR costs $594.44 per month and $4,166.63 in interest, while 9% costs $653.89 and $7,733.29 — about $3,566.66 more. Get pre-approved at a bank or credit union before visiting the dealer, then let the finance office try to beat that number; competition is the only reliable rate discount.

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<a href="https://thetaxcalc.com/auto-loan-calculator" title="Auto Loan Calculator 2026 — Car Payment, Interest & Trade-In">Auto Loan Calculator 2026 — Car Payment, Interest & Trade-In</a>

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