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Car Payment Calculator

Your monthly auto loan payment, including trade-in, sales tax, fees and any negative equity.

Enter the vehicle price and your rate to see the monthly payment.

The negotiated price, before tax and fees.

Trade-in

Anything above the value gets rolled into the new loan.

Tax and fees

Doc, title, registration.

Most states do, which makes a trade-in worth more than its sticker value. A few tax the full price regardless.

Exact calculation. Given your inputs, this is the answer — no estimation involved.

How this calculator works

The amount financed is the price plus sales tax and fees, less your down payment and trade-in equity. That figure is then amortised at your rate over your term using the standard loan formula.

Two details separate this from a generic loan calculator. First, most states charge sales tax on the price **after** the trade-in is deducted — on a $30,000 car with a $10,000 trade-in that is worth several hundred dollars, and a handful of states do it differently, so it is a toggle.

Second, negative equity is handled explicitly. If you still owe more on your trade-in than it is worth, the shortfall is rolled into the new loan rather than quietly ignored. That is what actually happens at the dealership, and it is the main reason a payment quote comes back higher than expected.

The formula

Exactly what happens to your numbers, step by step.

  1. Trade-in equity

    equity = trade-in value − amount still owed

    A negative result is rolled into the new loan.

  2. Sales tax

    taxable = price − trade-in value  (where the state allows the credit)
tax     = taxable × rate

  3. Amount financed and payment

    financed = price + tax + fees − down payment − equity
payment  = financed · i ÷ (1 − (1 + i)⁻ⁿ)

A worked example

A $30,000 car, $5,000 down, a $10,000 trade-in owing $12,000, 6% sales tax, 6% APR over 60 months.

What you enter

Vehicle price
$30,000
Down payment
$5,000
Trade-in value / owed
$10,000 / $12,000
Sales tax
6%, credited on trade-in
Rate and term
6% over 60 months

The working

Trade-in equity
10,000 − 12,000 = −$2,000
Taxable amount
30,000 − 10,000 = $20,000
Sales tax
$1,200
Amount financed
30,000 + 1,200 + 500 − 5,000 + 2,000
Financed total
$28,700

About $555 a month for 60 months

You start this loan owing $28,700 on a $30,000 car — and it is worth less than that the moment you drive it away. The $2,000 of negative equity is the reason.

Assumptions

Every result here rests on these. Change your inputs and the result changes with them.

  • A fixed APR for the whole term.
  • Sales tax is charged on the vehicle price; the trade-in credit is applied if you select it.
  • Fees are financed rather than paid in cash.
  • No extended warranty, gap insurance or dealer add-ons are included.

What this cannot tell you

  • It does not include insurance, fuel, maintenance or registration renewals — see the Car Affordability Calculator for the full picture.
  • Manufacturer rebates and subsidised finance rates are not modelled.
  • Actual tax treatment varies by state and sometimes by county.

Questions people ask

Does a trade-in reduce my sales tax?

In most states, yes — you are taxed on the difference rather than the full price. On a $30,000 car with a $10,000 trade-in at 6%, that credit is worth $600. A few states tax the full price regardless, hence the toggle.

What happens if I owe more than my trade-in is worth?

The shortfall gets added to the new loan. You start the new car already owing more than it is worth, and that gap tends to persist for years. It is usually better to keep the current car until the balance clears.

Is a 72 or 84-month car loan a bad idea?

The payment is lower and the total cost is higher — often thousands more in interest. Worse, you are underwater for most of the loan, so an accident or a need to sell becomes expensive. If a car only fits with an 84-month term, it is usually the wrong car.

Should I take the rebate or the low APR?

Work out both. Calculate the payment with the rebate at your bank’s rate, then with the manufacturer’s subsidised rate and no rebate, and compare the totals. On shorter terms the rebate often wins.

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Sources and review

This calculator uses standard arithmetic with no external rules or published rates, so there is nothing to cite beyond the formulas shown above.

Methodology version 1.0.0 · Last reviewed