Auto Loan Calculator

1. Enter the vehicle price, your cash down payment, sales tax rate and fees as the dealer writes them.
2. Add your trade-in value and, if you still have a loan on it, the amount you owe. Any shortfall (negative equity) is added to the loan.
3. Set the APR and term, then compare the monthly payment with the amount financed and total interest.

Quick answers

How is negative equity rolled into a car loan?

If you owe $9,000 on a car the dealer values at $6,000, the $3,000 difference is added to the new loan. The calculator does this automatically when amount owed is higher than the trade-in value.

Does positive equity lower the loan?

Yes. If the trade is worth more than you owe, the leftover equity works like extra down payment.

Is sales tax charged on the trade-in?

This calculator taxes the price minus the trade-in value, which is how most US states assess it. If yours taxes the full price, set the rate to 0 and add the tax to fees.

Edge cases and limits

• Rolling negative equity into a longer term keeps the payment down but means you start the new loan owing more than the car is worth.
• Use your lender's payoff quote for the amount owed; it includes interest to the payoff date.
• For a dedicated look at how far underwater a trade is, use the Negative Equity Auto Loan Calculator.

The financed amount is what the payment is built on, so the order of operations matters: tax and fees are added to the price, then your cash and trade come off the total.

• Sales tax = (vehicle price − trade-in) × tax rate ÷ 100
• Out-the-door price = vehicle price + sales tax + fees
• Trade equity = trade-in value − amount owed on it (negative = negative equity)
• Amount financed = out-the-door price − down payment − trade equity (never below $0)
• Monthly rate r = APR ÷ 100 ÷ 12, payments n = term in months
• Payment = financed × r ÷ (1 − (1 + r)^−n); at 0% APR it is financed ÷ n
• Total interest = payment × n − financed

The amount financed — not the sticker price — is what your payment is built on. Total cost of the vehicle adds your cash and trade-in back on top of what the loan repays.

Common mistakes and assumptions

• Assuming the tax basis matches your state. This calculator taxes the price minus the trade-in; some places tax the full price.
• Double-counting the trade-in as a down payment. Enter each in its own field.
• Stretching the term to hit a payment: the payment falls but total interest rises.

A $32,000 vehicle with $3,000 down, a $6,000 trade-in, 6.5% sales tax, $600 in fees, financed at 7.25% for 60 months.

1. 1Taxable base = $32,000 − $6,000 = $26,000, so sales tax = $1,690.
2. 2Out-the-door = $32,000 + $1,690 + $600 = $34,290.
3. 3Amount financed = $34,290 − $3,000 − $6,000 = $25,290.
4. 4Monthly rate = 7.25 ÷ 1200 = 0.00604167 over 60 payments gives a payment of $503.76.
5. 5Total interest = $503.76 × 60 − $25,290 = $4,935.64.

What is the monthly payment on a $40,000 car loan?

At 7% APR, $40,000 financed costs about $792 a month over 60 months ($7,523 total interest) or about $682 over 72 months ($9,101 interest). Your rate, term, tax, fees, and trade-in change the amount financed, so enter your own deal above.

How is sales tax handled?

It is charged on the vehicle price minus your trade-in allowance, which is the most common US rule. Some states tax the full price with no trade credit; in that case leave the rate at 0 and enter the dollar tax under fees.

What if I owe more than my trade is worth?

That gap is negative equity. For a quick payment estimate here, enter 0 as the trade-in value and add the shortfall to the fees field, which is how a dealer rolls it into the financed amount. To see how much negative equity you are carrying, what it adds to each payment, and how far underwater the new loan starts, use the Negative Equity Auto Loan Calculator.

Does this include an extended warranty or gap insurance?

Only if you add them to the fees field. Dealer add-ons are financed just like the vehicle, so they raise both the payment and the interest you pay.

Is a longer term cheaper?

The monthly payment is lower, but the total interest is higher and you stay underwater longer. Compare the total interest line across terms, not just the payment.

Worked answers with real figures and stated assumptions, written around the question people usually arrive with.

• How much car can I afford on my salary?Turn take-home pay into a vehicle price you can carry, including the running costs a payment calculator ignores.
• Car payment vs total cost of ownershipA five-year cost breakdown showing how much of vehicle cost sits outside the loan payment.