Auto Loan Calculator
U.S. Flagship #07Loans & MortgagesYour monthly car payment and interest.
Car & financing
Enter a vehicle price to see your monthly payment.
Advanced options
Tax base: $0 after subtracting the trade-in value.
Results
Enter a vehicle price to see your monthly payment.
Know what this estimate is based on
- Jurisdiction
- United States auto-finance planning model
- Rules and time period
- User-entered planning assumptions; APR, taxes, trade-in treatment, incentives, and fees are not live quotes.
- Scope and limitations
- Educational estimate only. Sales tax, trade-in treatment, title and dealer fees, incentives, add-ons, APR, underwriting, depreciation, and prepayment rules vary by state, vehicle, dealer, and lender.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the vehicle price, your down payment, the interest rate (APR) and the loan term in months — the monthly payment updates as you type.
- 02
Open Advanced options to add a trade-in (and anything still owed on it), sales tax, your state's trade-in tax treatment, fees rolled into the loan, gross monthly income for the affordability check, an extra payment, and expected depreciation.
- 03
Review the payment, amount financed, total interest and full cost, the negative-equity timeline and break-even point, the 20/4/10 affordability check, the loan-term comparison and the year-by-year schedule.
Formula
The amount financed is the out-the-door cost minus what you bring: financed = price + sales tax + rolled-in fees − down payment − net trade-in, where net trade-in is the trade-in value minus anything still owed. Sales-tax treatment varies by state. With a trade-in tax credit, tax = max(0, price − trade-in) × tax rate; without it, tax = price × tax rate. The calculator uses the rule you select. That financed amount is amortized like any loan: with monthly rate i = APR ÷ 12 and n = the term in months, the payment is M = financed × i × (1 + i)ⁿ ÷ ((1 + i)ⁿ − 1), or financed ÷ n when APR is 0. Total interest is M × n − financed. Because a car depreciates, the calculator tracks its estimated value against the falling balance; while the balance is higher, the loan is underwater. Any extra payment goes to principal, shortening the term and cutting interest. The affordability check applies the 20/4/10 guideline: at least 20% down, a term of 48 months or less, and a payment under 10% of gross monthly income.
Example
Take an 800,000 car with 100,000 down at 6% APR over 60 months, with no tax or trade-in for now. You finance 800,000 − 100,000 = 700,000. The monthly rate is 6% ÷ 12 = 0.5% over 60 payments, giving a payment of about 13,533 a month. Across 60 months you repay roughly 811,900, so total interest is about 111,900 and the car costs you 911,900 all in. In Advanced options, add 7% sales tax and a 50,000 trade-in. With the trade-in tax credit selected, tax applies to 750,000 and adds 52,500, so the financed amount becomes 702,500. Turn the credit off and tax instead applies to the full 800,000. Now picture depreciation: if the car loses about 20% in its first year it is worth around 640,000 after twelve months, while you still owe roughly 580,000 — comfortably above water here thanks to the large down payment. Put little or nothing down, though, and the balance can sit above the car's value for a year or more.
Definitions
- Vehicle price
- The agreed purchase price of the car before tax, fees, trade-in or down payment (0 to 200,000).
- Down payment
- Cash you pay upfront, which reduces the amount financed by the same amount (0 to 100,000).
- Interest rate (APR)
- The annual percentage rate on the auto loan; divided by 12 for the monthly amortization (0% to 30%).
- Loan term
- Months to repay the car loan, typically 36 to 84; longer terms lower the payment but raise total interest and keep you underwater longer (12 to 96 months).
- Trade-in value
- A credit for a vehicle you trade in. It lowers the amount financed; whether it also lowers the taxable price depends on state rules (0 to 100,000).
- Owed on trade-in
- Any balance still outstanding on the car you trade in. If it is more than the trade-in is worth, the difference is negative equity that rolls into the new loan (0 to 100,000).
- Sales tax
- State and local tax rate applied to either the full vehicle price or the price after trade-in, according to the rule you select (0% to 15%).
- Fees rolled into loan
- Title, registration, documentation or dealer fees added to the loan rather than paid in cash (0 to 10,000).
- Gross monthly income
- Your pre-tax monthly income, used only for the 20/4/10 affordability check against the payment (0 to 50,000).
- Extra monthly payment
- An optional amount paid above the scheduled payment, applied straight to principal so the loan finishes early and total interest falls (0 to 2,000).
- Annual depreciation
- How much value the car loses each year after the fixed first-year drop, used to estimate when the loan balance falls below the car's worth (0% to 30%).
- Amount financed
- The loan principal after tax, fees, trade-in and down payment — what the monthly payment is calculated on.
- Negative equity (underwater)
- Owing more on the loan than the car is currently worth — a risk if you sell, trade in, or total the car before the balance catches up to its value.
Good to know
What makes a car loan different
An auto loan looks like any other installment loan on the surface — a fixed payment that amortizes a balance over a few years — but the asset behind it behaves in a way that shapes every decision. A car is a depreciating asset: unlike a house, which may hold or gain value, a vehicle is worth less every year and loses a notable chunk of its value the moment it is driven off the lot. The loan, meanwhile, is repaid on a schedule that has nothing to do with how fast the car loses value. This mismatch is the central tension of car financing, and almost every piece of advice about auto loans flows from it. It means the size of your down payment, the length of your term, and the rate you accept are not just questions of affordability; together they determine whether you spend part of the loan owing more than the car is worth, exposed to a loss you would have to cover out of pocket. It also means a car loan should be sized against two clocks at once: the loan's balance falling toward zero, and the car's value falling toward whatever it will eventually be worth. Reading an auto loan well therefore means thinking about the car's depreciation alongside the loan's amortization, not just the monthly payment in isolation. The buyers who get into trouble are usually the ones who looked only at the payment, found it affordable, and ignored how the two curves diverged. The calculator models both sides of that picture — the loan's amortization and, from a depreciation rate you set, the car's falling value — and plots the two curves together so you can see exactly when they cross and whether the financing is sound.
Depreciation and the risk of being underwater
Depreciation is the gradual loss of a vehicle's market value over time, and it is steepest in the first year or two of ownership, when a new car can shed a large share of its value almost immediately. When you finance a car with little money down over a long term, the loan balance can fall more slowly than the car's value, leaving you in a position known as being underwater or having negative equity: you owe the lender more than you could sell the car for. As long as you keep the car and keep paying, negative equity is mostly invisible and does no immediate harm. It becomes a real problem the moment you need to part with the car early — if you want to trade it in, if it is stolen, or if it is written off in an accident — because the sale or insurance payout covers only the car's current value, and you are left owing the gap. That gap can amount to a substantial sum on a poorly structured loan, and it lands at the worst possible time, often when you also need to fund a replacement. A larger down payment and a shorter term are the two most effective defenses, because both keep the loan balance closer to the car's actual worth throughout the loan. Choosing a model that holds its value better also helps, since slower depreciation narrows the gap from the other side. Before you sign, the negative-equity timeline and the value-versus-balance chart in this calculator show exactly where you would stand a year or two in: if a modest down payment and a long term would leave you well underwater after the steepest depreciation has hit, that is a signal to put more down, shorten the term, or choose a less expensive car.
Rolling negative equity into a new loan
One of the most expensive habits in car buying is rolling negative equity forward. It happens like this: you still owe more on your current car than it is worth, but you want a new one, so the dealer adds the leftover balance from the old loan onto the new one. The new loan now finances not just the new car but the shortfall from the old one, meaning you start the new loan already underwater — sometimes deeply, before you have driven a mile. Each time this cycle repeats, the negative equity compounds and the amounts grow, quietly turning a series of reasonable-looking deals into a debt that outlasts the cars themselves. It is a trap precisely because each individual step feels manageable: the payment is affordable, the dealer makes it easy, and the underlying problem is hidden inside the new loan amount. The calculator can illustrate the underlying math plainly: a higher financed amount at the same rate and term produces a bigger payment and far more total interest, and that higher balance also keeps you underwater longer, setting up the next roll. The way to break the cycle is to keep a car until you have positive equity — until it is worth more than you owe — or to pay off the shortfall in cash rather than financing it, so each new loan starts on solid ground rather than in a hole. If you find yourself repeatedly trading in cars you still owe money on, it is usually a sign of buying more car, or more often, than your budget supports, and the most valuable move is to keep the current car long enough to climb back above water before changing anything.
Sales tax, fees, and the out-the-door price
The sticker price is rarely what you actually finance. Sales tax, title and registration charges, documentation fees, and various dealer add-ons all sit on top, and many buyers roll some or all of them into the loan rather than paying cash. The advanced inputs in this calculator let you model that reality so the payment reflects the real deal rather than the advertised price. Sales tax, in most jurisdictions, is charged on the price after any trade-in is deducted, which is why a trade-in can save you tax as well as reduce the amount you borrow — a point worth confirming for your own area, since the rules vary. Fees rolled into the loan increase the principal and therefore both the payment and the total interest, since you are now paying interest on the fees for the whole term; paying them in cash instead, where you can, avoids that compounding. The phrase to keep in mind is the out-the-door price — the genuine total to drive the car away, including tax and fees — because that figure, minus your down payment and any trade-in, is what you are really financing. Negotiating on the out-the-door number rather than the sticker price keeps add-ons from inflating the deal after you think you have agreed, a tactic where extras and fees appear only at the financing desk. It also pays to scrutinize the add-ons offered at that desk, such as extended warranties, paint protection, or service plans, since rolling optional products into the loan means financing them at the loan's interest rate over several years. Decide which of those you genuinely want, price them separately, and keep the financed amount as close to the true cost of the car as you can.
The trouble with long loan terms
Auto loans have stretched longer over the years, with six- and even seven-year terms now common, marketed on the appeal of a lower monthly payment. The payment really is lower, and for a buyer focused only on the monthly figure the appeal is obvious — but the trade-offs are significant and largely hidden. First, you pay interest for more years, so the total cost of the car rises even as the monthly figure falls; the saving on the payment is borrowed from your future self with interest attached. Second, and more insidiously, a long term keeps you underwater for much longer, because the balance falls slowly while the car keeps depreciating — you can spend most of a seven-year loan owing more than the car is worth, exposed the whole time to the negative-equity risks described above. Third, cars wear out, and a long loan can still have years left to run when the vehicle starts needing real money in repairs, leaving you paying for two cars' worth of cost on one aging car, or tempted to trade in while still underwater. A useful self-check is the term you need to make the payment work: if you can only afford the car over six or seven years, it is often a sign the car is beyond what your budget comfortably supports, and a less expensive vehicle on a shorter term would leave you in a far stronger position. Many careful buyers cap themselves at a shorter term precisely as a discipline — if the payment on that term is uncomfortable, they choose a cheaper car rather than a longer loan. The monthly figure is real, but it is the least informative number in the deal; the term and the total cost tell you far more about whether the purchase is wise.
Dealer financing versus your own lender
When you finance at the dealership, the dealer often acts as a middleman: they send your application to lenders, receive a rate, and may add a markup on top before presenting it to you, keeping the difference as profit. This is not always a bad deal — manufacturers sometimes subsidize genuinely low promotional rates that an outside lender cannot match, and for a well-qualified buyer those offers can be excellent — but it does mean the first rate you are offered is not necessarily the best one available to you, and the convenience of one-stop financing can cost more than it appears. The simplest protection is to arrange your own financing before you shop. A pre-approval from your bank or credit union gives you a concrete rate and a borrowing limit, which does two valuable things at once: it sets a benchmark against which to judge the dealer's offer, and it lets you negotiate the car's price as a cash buyer, separately from the financing, so the two are not blended together in a way that hides the cost of either. If the dealer can beat your pre-approved rate, take it — you have lost nothing by checking. If not, you already have a loan in hand and can decline the dealer's financing without losing the car. Treating financing as a competitive quote rather than an afterthought can save more than haggling over the price itself, because the rate applies to the whole balance over years. It also helps to keep the negotiation in stages: agree the price of the car first, then discuss the trade-in, then financing, so the dealer cannot shuffle gains in one to disguise losses in another.
Gap insurance and total-loss protection
Gap insurance addresses the specific risk created by negative equity, and understanding when it earns its cost is part of structuring a car loan well. If your financed car is stolen or totaled in an accident, your ordinary auto insurance pays out only the car's current market value — which, if you are underwater, can be less than your remaining loan balance. Gap coverage pays the difference, the gap between what you owe and what the car was worth, so a single bad event does not leave you making payments on a car you no longer have, or scrambling to cover a shortfall while also buying a replacement. It is most worth considering exactly when the calculator and the car's depreciation together show you spending a long stretch underwater: a small down payment, a long term, or a fast-depreciating vehicle all widen the gap and lengthen the time you are exposed to it. Conversely, if you put enough down and chose a short enough term that your loan balance tracks the car's value closely, the gap may be small or nonexistent, and the coverage becomes far less necessary. Where you buy the coverage matters too, since the price offered at the dealership is often higher than what your own insurer would charge for the same protection, so it is worth comparing rather than accepting the first quote. Like any insurance, gap coverage is a hedge against a low-probability but high-cost event, and the right call depends on how exposed your particular loan leaves you. Use the structure of your financing to decide: the more underwater the deal puts you and the longer it keeps you there, the more a modest premium to close that gap is worth paying.
Total cost of ownership beyond the payment
The monthly loan payment is only one line in the real cost of owning a car, and judging affordability by the payment alone is how many budgets quietly come unstuck. Insurance premiums, fuel or charging, registration and taxes, routine maintenance, tires, and the occasional larger repair all add up, and together they can rival or even exceed the loan payment itself over the life of the vehicle. Different cars carry very different ownership costs even at the same purchase price: a powerful engine may cost more to insure and fuel, a luxury badge can mean expensive parts and specialist servicing, and some models simply depreciate faster or prove less reliable than others, which shows up as higher repair bills and a weaker trade-in later. A more expensive car to buy is often a more expensive car to keep, and the gap compounds over the years you own it. When you judge whether a car fits your budget, it helps to add a realistic estimate of these running costs to the payment this calculator produces, rather than treating the loan payment as the whole story. Researching a model's typical insurance cost, fuel economy, and reliability before you commit can reveal that two cars with similar prices have quite different true costs to own. A slightly cheaper, more economical, more reliable car can leave you with meaningfully more breathing room each month once everything is counted — and that breathing room is exactly what protects you if your income dips, rates rise on your other borrowing, or an unexpected expense lands. The goal is not the lowest payment but the lowest total burden you can live with comfortably, which is a different and more useful target.
The 20/4/10 rule and how much car you can afford
A widely used guideline for car buyers compresses three separate decisions into one easy-to-remember test: 20/4/10. Put down at least 20% of the price, keep the loan term to four years (48 months) or less, and keep your total monthly vehicle payment under 10% of your gross monthly income. Each part defends against a different failure. The 20% down payment puts you close to — or ahead of — the car's value from day one, which is the single most effective way to avoid the negative equity that fast first-year depreciation creates. The four-year term keeps the balance falling fast enough to stay near the car's worth and limits how much interest you pay, while a longer term does the opposite on both counts. And the 10% payment ceiling keeps the car from crowding out the rest of your budget, leaving room for the insurance, fuel, and maintenance that the loan payment does not cover. The affordability check in this calculator evaluates all three against your own figures and shows clearly which you meet and which you miss, once you enter your gross monthly income. The rule is a guideline, not a law: plenty of sensible buyers stretch one part for good reasons, such as a slightly longer term on a very reliable car they intend to keep for a decade. But the further a deal drifts from all three conditions at once — a small down payment, a long term, and a payment that eats well into your income — the more it is telling you that the car is more than your finances comfortably support. Treat a deal that misses all three not as a problem to finance around with a longer term, but as a prompt to look at a less expensive car, where the same income buys a far stronger position.
Reading your results: payment, break-even and extra payments
The headline monthly payment is where most people stop, but the numbers underneath it tell you whether the loan is actually a good idea. Start with the total interest and the full cost of the car, which reveal what the financing adds on top of the price — the figures most worth minimizing, and the ones a longer term quietly inflates. Then read the negative-equity timeline and the break-even month, which together answer the question that sets a car loan apart from other borrowing: for how long will you owe more than the car is worth? A short or nonexistent underwater stretch means a small down payment was enough and your position is resilient; a long one is a signal to put more down, shorten the term, or buy a cheaper car, and it is precisely the window in which gap insurance earns its cost. The loan-term comparison lets you see the trade-off directly, lining up the payment, the total interest, and the months spent underwater for several terms at once, so the appeal of a lower payment is shown next to its true price. The extra-payment input closes the loop: because anything above the scheduled payment goes straight to principal, even a modest monthly addition can shave months off the loan, cut hundreds from the interest, and pull you out of negative equity sooner — and the calculator shows exactly how much. The most reliable way to use this tool is as a planning laboratory rather than a single answer: change one input at a time — the down payment, the term, the extra payment — and watch which lever moves your cost and your risk the most. Almost always you will find that a larger down payment and a shorter term do more for your position than hunting for a slightly lower rate, and that the smallest monthly payment is the least informative number on the page.
Frequently asked questions
What does it mean to be 'underwater' on a car loan?
A car loses value the moment you drive it off the lot, and on a long loan the balance can fall slower than the car's value. When you owe more than the car is worth, you are underwater (have negative equity). The negative-equity timeline and the value-versus-balance chart show how long that lasts and when you break even. It matters if you sell, trade in, or total the car early, because you would still owe the difference to the lender.
How much car can I actually afford?
A common rule of thumb is 20/4/10: put at least 20% down, keep the term to four years (48 months) or less, and keep the payment under 10% of your gross monthly income. The affordability check flags each of those three conditions against your own numbers once you enter your income. Missing one is not fatal, but a deal that misses all three — little down, a long term, and a heavy payment — is usually a sign to choose a cheaper car.
Should I take a 72- or 84-month loan to lower the payment?
A longer term shrinks the monthly payment but you pay interest for more years and stay underwater far longer, since the balance falls slowly while the car keeps depreciating. The loan-term comparison shows the payment, total interest and months underwater side by side for 36, 48, 60 and 72 months. If you need a six- or seven-year term to afford the payment, it is often a sign the car is more than your budget comfortably supports.
Is it worth paying extra each month?
Usually yes, if you have no higher-rate debt and a healthy emergency fund. Because every extra amount goes straight to principal, it erases the future interest that principal would have cost and shortens the loan. Enter an extra amount in Advanced options and the calculator shows exactly how many months it saves and how much interest it removes — and it gets you out of negative equity sooner, too.
How does a trade-in change my taxes?
Rules vary by state. Some states let a qualifying trade-in reduce the vehicle price subject to sales tax; others tax the full price. Choose the treatment that applies to your deal. The trade-in value still reduces the amount financed either way, while any balance you still owe is added back as negative equity.
Is dealer financing or my own bank better?
Dealers can offer genuine promotional rates, but they may also mark up the rate a lender quotes and keep the difference. Getting pre-approved by your bank or credit union first gives you a benchmark rate to compare against, and lets you treat the dealer's offer as just one more quote.
Does this include insurance, fuel and maintenance?
No — it covers only the loan. The true cost of owning a car also includes insurance, fuel or charging, registration, and maintenance, which can rival the loan payment itself. Treat the monthly payment here as one part of a larger ownership budget.