Calculated using standard mathematical and industry formulas.
Auto loan payments depend on vehicle purchase price, down payment, trade-in allowance, interest rate, and loan term (36 to 72 months). A $30,000 car loan at 5.5% interest over 60 months yields a $573 monthly payment and $4,380 in total interest costs.
How to use this calculator?
Enter the sticker or negotiated price of the vehicle.
Enter your cash down payment amount.
Enter the estimated trade-in allowance for your current vehicle.
Select your loan term length in months (e.g. 48, 60, or 72 months).
Enter the annual interest rate (APR) provided by your lender or dealership.
Enter your local or state auto sales tax percentage.
Review your monthly payment breakdown, net financed amount, sales tax, and total interest cost.
L = Loan Amount, r = monthly interest rate (APR ÷ 12 ÷ 100), n = loan duration in months.
Step-by-step calculation example
Vehicle price $35,000, $5,000 down, $2,000 trade-in, 7% sales tax ($2,310 tax), net loan $30,310 at 6.5% APR for 60 months → $592.89/month ($5,263 total interest).
Key insights to remember
Trade-in value reduces taxable vehicle price in most states, saving you money on auto sales tax.
A larger down payment (aim for 20% on new cars, 10% on used cars) keeps you from becoming upside-down on your auto loan.
Longer loan terms (72 or 84 months) lower monthly payments but dramatically increase total interest paid over the life of the loan.
Auto loan interest rates are typically lower for new vehicles compared to used cars due to lower lender risk.
Lenders evaluate your Debt-to-Income (DTI) ratio; aim to keep total car payments under 10–15% of gross monthly income.
How to interpret your results?
The 20/4/10 Budget Rule
Protect your budget by putting 20% down, financing for no longer than 4 years (48 months), and keeping total auto expenses (payment + insurance) below 10% of gross income.
Expert advice & guidance
💡 Car buying tip: Avoid 72- or 84-month loan terms. While lower monthly payments seem appealing, rapid vehicle depreciation often leaves borrowers 'underwater' owing more than the car is worth.
Frequently asked questions
How much car can I afford based on my income?
Follow the 20/4/10 rule: put 20% down, finance for no more than 4 years, and keep total monthly auto expenses (payment + insurance) below 10% of gross income.
Is it better to lease or buy a car?
Leasing offers lower monthly payments and newer cars every 3 years but builds zero equity. Buying builds long-term asset value once paid off.
What is a good APR interest rate for an auto loan?
A good auto loan APR ranges from 4% to 7% for prime borrowers (credit score 720+); rates increase for lower credit tiers.
How to pay off a car loan faster?
Pay off car loans faster by making biweekly payments, adding extra principal to monthly payments, or refinancing to a shorter loan term.
Related calculators
Loan Calculator: Monthly Payment & Interest — Calculate monthly personal loan payments, total interest cost, and payoff schedule with our loan calculator. Compare different APR interest rates and terms.
Salary Calculator: Hourly to Annual Wage — Convert between hourly wage, daily, weekly, monthly, and annual salary. Calculate take-home earnings and overtime pay based on customized work schedules.