# Free online auto loan calculator

> An auto loan is money you borrow to buy a car and pay back over time. This calculator shows your monthly payment and the total cost, including interest, taxes, and fees.

Calculate the monthly car payment, total interest, and full amortization schedule for any auto loan, including down payment, trade-in, sales tax, and fees.

**Interactive version:** https://onlinecalculator.me/finance/auto-loan/
**Category:** Finance

## How to use

1. Enter the vehicle price, down payment, trade-in value, sales tax %, and any fees.
2. Set the APR (from your lender) and loan term in months.
3. Optionally add an extra monthly payment to see interest savings.
4. The calculator shows the net loan amount, monthly payment, and total interest.
5. Press "Show schedule" for the full month-by-month amortization table.

## Formula

The loan amount is built up in two steps, and the monthly payment uses the standard amortization formula.

**Loan amount:**

```
Taxable base = price − down payment − trade-in
Sales tax    = taxable base × (tax% / 100)
Loan amount  = taxable base + sales tax + fees
```

**Monthly payment:**

```
M = L × r(1 + r)ⁿ / ((1 + r)ⁿ − 1)
```

Where **L** is the loan amount, **r** is the monthly rate (APR ÷ 12 ÷ 100), and **n** is the term in months.

## Worked example

Vehicle: $35,000 | Down: $5,000 | Trade-in: $0 | Tax: 8% | Fees: $500 | Rate: 6.5% APR | Term: 60 months

- Taxable base: $35,000 − $5,000 = $30,000
- Sales tax: $30,000 × 0.08 = $2,400
- Loan amount: $30,000 + $2,400 + $500 = **$32,900**
- Monthly rate: 6.5 ÷ 12 ÷ 100 ≈ 0.005417
- Monthly payment: ≈ **$643/month**
- Total interest: ≈ **$5,580**
- Total cost of the car: price + $500 fees + $5,580 interest = **$41,080** (versus the $35,000 sticker).

## Notes

- **APR vs. dealer rate** — dealers often markup the lender's rate by 1–3%. Get a quote from your bank or credit union first and use it as your negotiating floor.
- **Trade-in cuts both loan and tax** — in most U.S. states the trade-in value reduces the taxable base before sales tax is applied, so the savings are bigger than just the principal cut. A few states don't allow this; check local rules.
- **Term length is a trap** — a 72- or 84-month loan lowers the monthly payment but dramatically increases total interest and the window where you owe more than the car is worth ("underwater").
- **Not included**: GAP insurance, extended warranties, and dealer add-ons. These roll into the loan silently and can add 5–15% to the total paid. Decline them unless you've priced them separately.
- **Extra monthly payments** go straight to principal and can shave months off a typical auto loan for the price of one skipped coffee a day.

## Frequently asked questions

### How is the auto loan monthly payment calculated?

Same formula as a mortgage: M = L × r(1+r)^n / ((1+r)^n − 1), where L is the net loan amount after down payment and trade-in, r is the monthly rate (APR ÷ 12), and n is the term in months.

### How does the trade-in value affect the loan?

The trade-in is subtracted from the vehicle price before sales tax is applied — the same way a down payment reduces the financed amount. This lowers the taxable base, which reduces both the loan amount and the sales tax you pay.

### Is sales tax applied to the full vehicle price?

In most US states, sales tax is calculated on the vehicle price minus the down payment and trade-in (the "taxable amount"). The calculator follows this convention. Some states tax the full price — check your state's rules.

### What fees are included?

The Fees field covers documentation fees, registration, and any dealer fees. They're added to the loan amount since most buyers roll them in rather than paying cash.

### How does an extra monthly payment shorten the loan?

Extra payments go directly to principal, reducing the balance faster. The calculator simulates each month with the extra amount included and shows the revised payoff month and total interest saved.

## Sources

- [Auto loans — financing, interest, and total loan cost](https://www.consumerfinance.gov/consumer-tools/auto-loans/) — Consumer Financial Protection Bureau
- [Amortization calculator — periodic loan payment formula](https://en.wikipedia.org/wiki/Amortization_calculator) — Wikipedia

## Related calculators

- [Loan calculator](https://onlinecalculator.me/finance/loan/) — Simpler fixed-rate loan with no tax/fees fields — good for personal or student loans.
- [Mortgage calculator](https://onlinecalculator.me/finance/mortgage/) — Home loan with property tax, insurance, HOA, and PMI in extended mode.
- [Compound interest calculator](https://onlinecalculator.me/finance/compound-interest/) — See how savings or investments grow over time with compounding.
- [Income tax calculator](https://onlinecalculator.me/finance/income-tax/) — US federal income tax estimate with brackets and FICA for 2024.

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