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Auto · Finance

Auto Loan Calculator

Find your monthly car payment and the total interest you'll pay. Adjust the term to see exactly what a longer loan costs. Not financial advice.

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Inputs

Cash incentive from the automaker. It lowers what you finance; its tax treatment must already be reflected in the tax amount below.

Enter the dollar amount from a buyer's worksheet, dealer, or motor-vehicle agency. This starts at $0; the total excludes tax until you add it.

Doc, registration, and dealer fees rolled into the loan.

Result

Adjust the inputs to see your result.

How the math works

A car loan is amortized: the amount you finance is spread across the term in equal monthly payments, each split between interest and principal. The calculator first figures the amount financed — vehicle price, minus your down payment, trade-in, and any manufacturer rebate, plus sales tax and fees. Then it applies the standard amortization formula using your monthly rate (APR ÷ 12) and the number of months.

Trade-in and rebate tax treatment can vary by jurisdiction and by the structure of the deal. Rather than using an unsourced state average or guessing the taxable base, this tool asks for the transaction's sales or vehicle-tax dollar amount. Use a current buyer's worksheet or motor-vehicle estimate; the trade-in and rebate are then applied only to the amount financed.

Why a longer term is a trap

Stretching a loan from 60 to 84 months drops the monthly payment, which feels like a win on the lot. But you pay interest for two extra years, and a car loses value far faster than the loan shrinks — so you spend most of those years underwater, owing more than the car is worth. Change the term above and watch the "total interest" line move.

Common mistakes

  • Shopping by monthly payment. Dealers can hit almost any payment by stretching the term. Negotiate the price and the APR, not the payment.
  • Taking dealer financing without comparing. Get pre-approved by your bank or credit union first — then make the dealer beat it.
  • Rolling negative equity forward. Financing what you still owe on an old car into the new loan stacks the underwater problem.
  • Ignoring total cost. Payment plus insurance plus fuel should stay under about 15% of take-home pay.

When this calculator is the wrong tool

This estimates a standard fixed-rate purchase loan. It doesn't model leases (different math entirely), balloon payments, variable-rate loans, or determine transaction taxes and fees for you. It's a planning tool, not financial advice — confirm the tax amount, fees, and financing terms on the buyer's order and with your lender.

Related guide

Read the reasoning behind the numbers

FAQ

Questions, answered

How is a car payment calculated?
The lender amortizes the loan: the amount financed (price minus down payment and trade-in, plus sales tax and fees) is spread over the term at a fixed monthly interest rate (APR ÷ 12). Early payments are mostly interest; later ones are mostly principal. The formula is payment = P·r·(1+r)ⁿ ÷ ((1+r)ⁿ − 1).
What APR can I get on a car loan?
It depends on your credit score, the loan term, and whether the car is new or used. Excellent credit can see rates well under the national average; subprime borrowers pay much more. Always get pre-approved by your own bank or credit union before visiting the dealer — it gives you a rate to beat.
How long should a car loan be?
Keep it at 60 months or less if you can. Loans of 72 or 84 months lower the monthly payment but cost thousands more in interest and leave you 'underwater' — owing more than the car is worth — for years, since cars depreciate faster than the loan shrinks.
Does a trade-in lower my payment?
Yes. The trade-in value directly reduces the amount you finance. It may also change the transaction's taxable amount, but those rules vary by jurisdiction and deal. BenchCalcs does not guess that rule: enter the sales or vehicle-tax dollar amount from your buyer's worksheet, dealer, or motor-vehicle agency.
Does a manufacturer rebate lower my sales tax?
It depends on the transaction and jurisdiction. The calculator subtracts the rebate from the amount financed but does not infer its tax treatment. Enter the total sales or vehicle tax shown on a current buyer's worksheet or official estimate.
Should I put more money down?
A larger down payment lowers the loan, the monthly payment, and total interest, and it keeps you from going underwater. Aim for at least 10–20% down on a new car, which drops in value about 20% in the first year alone.