Car Payment Calculator

Work out the monthly payment on a car before you sign anything, and see what that payment adds up to over the whole term. Down payment, trade-in, sales tax and fees all feed into the loan amount, so changing any one of them moves the answer.

Building the Loan Amount First

Most payment calculators start from a loan amount and hide how it was arrived at. This one shows the construction, because that is where the surprises live — particularly the sales tax, which is charged on the full vehicle price whether or not you are financing it, and which therefore either increases your loan or comes out of your pocket on day one.

• The loan amount starts at the vehicle price, minus the down payment, minus the trade-in value, plus any other fees you enter.
• Sales tax is calculated on the full price, not on the amount you are financing. A seven percent rate on a 30,000 car is 2,100 regardless of how much you put down.
• If you choose to finance the tax it is added to the loan and you pay interest on it for the whole term. If you pay it upfront it never accrues interest at all.
• Fees are added to the loan and therefore also attract interest. A 500 documentation fee on a five-year loan at 5.5 percent actually costs about 574.

Running a Realistic Quote

1. Enter the vehicle price as negotiated, before tax and fees. This is the number you agree with the dealer, not the sticker price.
2. Enter your down payment and trade-in value separately. They are subtracted the same way, but keeping them apart makes it obvious how much of the purchase is being funded by the old car.
3. Choose a term. The page offers 24, 36, 48, 60, 72 and 84 months, which covers the range most lenders work in.
4. Enter the interest rate as an annual percentage, for example 5.5. If you have been quoted a rate for a specific term, use that rather than an advertised headline rate.
5. Enter the sales tax rate for your jurisdiction, choose whether to finance it, and add any fees you have been quoted.
6. Read the payment, then read the total interest and the total cost underneath it. The payment is what you feel monthly; the total cost is what the car actually costs you.

The Same Car, With Tax Financed or Paid Upfront

Take a 30,000 car with 5,000 down, no trade-in, 500 in fees, a 5.5 percent rate, seven percent sales tax and a 60-month term. The only variable is when the 2,100 of tax is paid, and the effect is larger than most people expect.

• With the tax financed, the loan amount is 27,600 and the payment is 527.19 a month. Total interest comes to 4,031.52 and the total cost of the car is 36,631.52.
• With the tax paid upfront, the loan amount drops to 25,500 and the payment to 487.08. Total interest falls to 3,724.78 and the total cost to 36,324.78.
• The difference in total cost is 306.74. That is the interest charged on 2,100 of tax across five years, and it is the price of not having the cash available on the day.
• The monthly difference is 40.11. Whether that trade is worth making is a cash-flow question, but it is a real cost and not an accounting detail.
• At a zero rate the page skips the interest formula entirely and divides the loan amount by the term, so 25,500 over 72 months returns 354.17 a month.

The Formula Behind the Payment

The payment comes from the standard amortisation formula that every lender uses: the loan amount multiplied by the periodic rate and by the rate compounded over the term, divided by that same compounded figure minus one. At a zero rate the formula would divide by zero, which is why the page tests for it and uses simple division instead.

• The monthly rate is the annual rate divided by twelve. There is no daily accrual and no compounding within the month.
• Total interest is simply the total of all payments minus the loan amount. It is not reported by a separate formula, which means the two figures can never disagree.
• Working the total cost the long way round gives the vehicle price plus fees plus interest plus tax, with the down payment and trade-in cancelling out. That consistency check is worth doing on any quote you receive.
• The payment is rounded for display only. The underlying figures stay precise, so the reported total is not the rounded payment multiplied by the term.

How Term Length Changes What You Pay

Alternative	Notes
Short terms of 24 to 36 months	The lowest total interest and the smallest risk of ending up owing more than the car is worth. The payment is high, and the loan is usually restricted to newer vehicles.
The conventional 60 months	The default the page uses, and still the most common choice. Interest is moderate and the car is normally worth more than the balance within a couple of years.
Long terms of 72 to 84 months	The payment falls but total interest rises steeply, and depreciation can outrun the balance for years. Many lenders price longer terms at a higher rate, which compounds the problem.
Leasing	A different product with a lower monthly figure, no ownership at the end and mileage limits. It can be cheaper if you replace cars regularly and discipline about mileage, and expensive if neither is true.

Payment Structure Questions

Should I finance the sales tax or pay it upfront?

If you have the cash, paying it upfront is cheaper by the amount of interest on the tax — 306.74 on the example above. Financing it is not irrational, though: it preserves your cash buffer, and if that buffer is what stops you using a credit card at 20 percent, financing tax at 5.5 percent is clearly the better of the two.

Why is my dealer's payment different from this?

Because dealer quotes often include products that are not part of the loan amount here — extended warranties, gap insurance, paint protection, document and registration fees. Enter them in the fees field to see their true cost, which for a five-year loan is roughly 115 percent of the fee itself. It is also worth checking whether the rate quoted is contingent on those add-ons.

Does a trade-in reduce the sales tax I pay?

In many jurisdictions yes, because tax is assessed on the price after the trade-in is credited rather than on the full price. This calculator taxes the full vehicle price, following the stricter and more common rule. If your state allows the trade-in credit, your actual tax will be lower than the figure shown.

Is this accurate enough to negotiate with?

It is accurate as arithmetic — the formula and the loan construction match what lenders use. Its limits are in the inputs. The rate depends on your credit and on the term, and the final contract will include fees you may not yet know about. Use it to understand the structure of the deal and to compare options, then check the finance office numbers against it.

Last verified: October 3, 2026

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Maintained by Huang Bin · Last updated October 3, 2026