Car payment calculator
- Runs in your browser
- No signup
- Formula shown below
- Reviewed
A car payment calculator finds the monthly cost of an auto loan from the amount financed, the annual percentage rate and the term in months, using M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1]. Financing $28,000 at 7.2% APR over 60 months produces a payment of $557.08 per month and $5,425 in total interest.
Result
Monthly car payment
$557.08
M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1]
- Amount financed
- $28,000.00
- Sales tax
- $0.00
- Total interest
- $5,424.77
- Total cost of the car
- $37,424.77
Financing $28,000 at 7.20% APR over 60 months gives a car payment of $557.08 per month. Total interest is $5,424.77 and the total repaid is $33,424.77.
How to use the car payment calculator
- 01
Enter the vehicle price
Type the out-the-door price you have negotiated, before any deposit or trade-in credit is applied.
- 02
Enter your cash down and trade-in
Add the cash deposit and the agreed trade-in allowance. Both reduce the amount financed directly.
- 03
Enter the APR and term
Type the annual percentage rate from the finance offer and the length of the loan in months. Common terms are 36, 48, 60 and 72 months.
- 04
Add sales tax if applicable
Enter your local sales tax rate to see it rolled into the financed amount rather than paid separately at signing.
- 05
Compare the totals
Read the monthly payment in the result strip, then check total interest and the true total cost of the car in the rows below.
The formula
P = price + sales tax − down payment − trade-in; M = P × [r(1 + r)ⁿ] ÷ [(1 + r)ⁿ − 1]
- P
- The amount financed after the deposit, trade-in credit and sales tax are applied.
- M
- The level monthly car payment.
- r
- The monthly rate: the APR divided by 100, then by 12.
- n
- The term in months.
Sales tax treatment varies by jurisdiction. Most US states tax the price after the trade-in credit is deducted; a minority tax the full price. This calculator applies tax to the vehicle price, which is the conservative case.
Worked example
- Vehicle price
- $32,000
- Down payment
- $4,000
- Trade-in value
- $0
- APR
- 7.2%
- Term
- 60 months
- Sales tax
- 0%
- Result
- $557.08 per month
The amount financed is $32,000 − $4,000 = $28,000. The monthly rate r is 7.2 ÷ 100 ÷ 12 = 0.006, and n is 60. Raising (1.006) to the 60th power gives 1.43128. Substituting: M = 28,000 × (0.006 × 1.43128) ÷ (1.43128 − 1) = $557.08. Across 60 payments the total repaid is $33,425, so interest costs $5,425 — about 19% of the amount financed.
Frequently asked questions
How much should a car down payment be?
A deposit of 20% on a new car and 10% on a used car is the conventional guideline. A larger deposit reduces the financed balance, lowers total interest, and shortens the period during which the loan exceeds the vehicle value. Because new cars depreciate fastest in the first year, a small deposit frequently produces immediate negative equity.
Is a 72-month or 84-month car loan a bad idea?
Long terms lower the monthly payment but raise total interest and extend the period of negative equity. Financing $28,000 at 7.2% costs $557.08 a month over 60 months with $5,425 of interest, or $477.94 a month over 72 months with $6,612 of interest. The longer term saves $79 a month and costs $1,187 more overall.
What credit score is needed for the best auto loan rate?
Lenders generally reserve their lowest advertised rates for scores of 720 and above, using the FICO Auto Score range of 250 to 900 or the standard 300 to 850 range. Borrowers in the 660 to 719 band typically pay two to four percentage points more, and subprime borrowers below 600 often pay in excess of 15% APR.
Should sales tax be rolled into the car loan?
Rolling sales tax into the loan preserves cash today but adds to the financed balance and therefore accrues interest for the whole term. On a $32,000 car with 7% tax, financing the $2,240 tax bill at 7.2% over 60 months costs an extra $434 in interest compared with paying it at signing.
What does negative equity on a car loan mean?
Negative equity, or being upside-down, means the outstanding loan balance exceeds what the vehicle would sell for. It arises because a new car typically loses 20% of its value in the first year while the loan balance falls more slowly. Gap insurance covers the shortfall if the vehicle is written off during that period.
Does dealer financing or a bank loan cost less?
Neither is systematically cheaper. Manufacturer captive-finance arms sometimes offer subsidised promotional rates well below market, while dealers may also mark up a third-party lender's rate as compensation. Obtaining a pre-approval from a bank or credit union before visiting the dealership establishes a benchmark the dealer must beat.
Sources
- Auto loans — shopping and comparison guidance — US Consumer Financial Protection Bureau
- Understanding vehicle financing — US Federal Trade Commission
- Consumer credit — auto loan terms and rates — US Federal Reserve
Last reviewed: · Formula and sources verified by Syed Aqeel Ahmad Gillani. See the methodology for how every calculation is derived.