# Auto loan calculator

> Auto loan calculator: monthly car payment with trade-in, amount owed, sales tax and fees, total interest, a payment schedule, or the price a budget buys.

Interactive version: https://www.calcopenly.com/finance/auto-loan-calculator
Subject: Finance calculators

The payment is worked out from the amount financed: the vehicle price minus the down payment, trade-in value and any rebate, plus whatever is still owed on the trade-in, plus sales tax and fees when they go into the loan. The monthly payment is L × r × (1 + r)^n ÷ ((1 + r)^n − 1), where L is the amount financed, r the APR ÷ 12 and n the number of months.

With the defaults, a 35,000 car with 4,000 down and a 6,000 trade-in, 7% sales tax on the 29,000 difference (2,030) and 1,200 of fees are rolled in, so 28,230 is financed. At 7% APR for 60 months the payment is 558.99 and interest totals 5,309.27. Paying the tax and fees upfront cuts the payment to 495.03 and saves 607.47 of interest.

Sales tax rules differ by state: whether a trade-in or rebate lowers the taxed price, and whether dealer fees are taxed. The schedule assumes a fixed rate and equal monthly payments, with no add-ons such as GAP cover or a service contract.

## Inputs

- **Calculate** (options: Monthly payment, Price I can afford)
- **Vehicle price**
- **Monthly payment budget**
- **Down payment**
- **Trade-in value**
- **Amount owed on trade-in**: The payoff balance on the car you trade in. Any amount above the trade-in value is added to the new loan.
- **Sales tax rate**: State plus local rate where the car is registered.
- **Trade-in lowers the taxed price**: Varies by state. Texas taxes the price minus the trade-in allowance; California taxes the full price and gives no trade-in credit (Texas Comptroller, CDTFA, checked 2026).
- **Title, registration and dealer fees**: Not taxed here. Some states tax the dealer documentation fee (California does); if yours does, add that fee to the price instead.
- **Sales tax and fees** (options: Add to the loan, Pay upfront)
- **Interest rate (APR)**
- **Loan term**
- **Cash rebate or incentive**
- **Rebate lowers the taxed price**: Texas deducts manufacturer and dealer rebates passed to the buyer before tax; California taxes the price before the rebate (checked 2026).
- **First payment date**

## Results

- Monthly payment — main result
- Vehicle price you can afford
- Amount financed
- Sales tax
- Cash due at purchase
- Total interest
- Total of all payments
- Total cost of the car
- Negative equity added to the loan
- Last payment

## Formula

$$
L = P - R - D - (V - O) + \underbrace{t\,(P - V - R)}_{\text{sales tax}} + F,\qquad M = \frac{L\,r\,(1+r)^n}{(1+r)^n - 1}
$$

## Worked examples

### 50,000 car, 10,000 down, tax and fees paid upfront

- Calculate: Monthly payment
- Vehicle price: 50,000
- Down payment: 10,000
- Trade-in value: 0
- Amount owed on trade-in: 0
- Sales tax rate: 7%
- Title, registration and dealer fees: 2000
- Sales tax and fees: Pay upfront
- Interest rate (APR): 5%
- Loan term: 60 months
- Cash rebate or incentive: 0
- **Monthly payment: 754.85**
- **Amount financed: 40,000.00**
- **Sales tax: 3,500.00**
- **Cash due at purchase: 15,500.00**
- **Total interest: 5,290.96**
- **Total cost of the car: 60,790.96**
- Checked against: Calculator.net auto loan calculator, published output for these inputs (fetched 2026-09-26): 754.85 a month, 5,290.96 interest, 60,790.96 total cost

### Texas: trade-in deducted before tax

- Calculate: Monthly payment
- Vehicle price: 25,000
- Down payment: 0
- Trade-in value: 10,000
- Amount owed on trade-in: 0
- Sales tax rate: 6.25%
- Trade-in lowers the taxed price: yes
- Title, registration and dealer fees: 0
- Sales tax and fees: Add to the loan
- Interest rate (APR): 6%
- Loan term: 48 months
- Cash rebate or incentive: 0
- **Sales tax: 937.50**
- **Amount financed: 15,937.50**
- **Monthly payment: 374.29**
- **Total interest: 2,028.55**
- Checked against: Texas Comptroller example (25,000 vehicle, 10,000 trade-in: tax due on 15,000) × 6.25%; payment and interest from Python decimal annuity formula

### California: no trade-in tax credit

- Calculate: Monthly payment
- Vehicle price: 25,000
- Down payment: 0
- Trade-in value: 10,000
- Amount owed on trade-in: 0
- Sales tax rate: 7.25%
- Trade-in lowers the taxed price: no
- Title, registration and dealer fees: 0
- Sales tax and fees: Add to the loan
- Interest rate (APR): 6%
- Loan term: 48 months
- Cash rebate or incentive: 0
- **Sales tax: 1,812.50**
- **Amount financed: 16,812.50**
- **Monthly payment: 394.84**
- **Total interest: 2,139.92**
- Checked against: CDTFA: the trade-in allowance is not deducted, so 7.25% of 25,000; payment from Python decimal annuity formula

### Negative equity: owe 11,000 on an 8,000 trade-in

- Calculate: Monthly payment
- Vehicle price: 30,000
- Down payment: 2000
- Trade-in value: 8000
- Amount owed on trade-in: 11,000
- Sales tax rate: 6%
- Trade-in lowers the taxed price: yes
- Title, registration and dealer fees: 800
- Sales tax and fees: Add to the loan
- Interest rate (APR): 8.5%
- Loan term: 72 months
- Cash rebate or incentive: 0
- **Negative equity added to the loan: 3,000.00**
- **Sales tax: 1,320.00**
- **Amount financed: 33,120.00**
- **Monthly payment: 588.82**
- **Total interest: 9,275.05**
- **Total cost of the car: 41,395.05**
- Checked against: Python decimal: 30,000 − 2,000 − 8,000 + 11,000 + 6% × 22,000 + 800 = 33,120; annuity payment at 8.5%/12 over 72 months

### Price a 500 budget buys, tax and fees in the loan

- Calculate: Price I can afford
- Monthly payment budget: 500
- Down payment: 3000
- Trade-in value: 0
- Amount owed on trade-in: 0
- Sales tax rate: 7%
- Title, registration and dealer fees: 1000
- Sales tax and fees: Add to the loan
- Interest rate (APR): 6%
- Loan term: 60 months
- Cash rebate or incentive: 0
- **Vehicle price you can afford: 26,039.98**
- **Amount financed: 25,862.78**
- **Sales tax: 1,822.80**
- **Total interest: 4,137.22**
- **Monthly payment: 500.00**
- Checked against: Python decimal: PV of 60 payments of 500 at 0.5% = 25,862.78; price = (25,862.78 − 1,000 + 3,000) ÷ 1.07

### Price a 450 budget buys, tax and fees paid upfront

- Calculate: Price I can afford
- Monthly payment budget: 450
- Down payment: 2000
- Trade-in value: 5000
- Amount owed on trade-in: 1000
- Sales tax rate: 8.25%
- Trade-in lowers the taxed price: yes
- Title, registration and dealer fees: 900
- Sales tax and fees: Pay upfront
- Interest rate (APR): 5.5%
- Loan term: 48 months
- Cash rebate or incentive: 0
- **Vehicle price you can afford: 25,349.45**
- **Amount financed: 19,349.45**
- **Sales tax: 1,678.83**
- **Cash due at purchase: 4,578.83**
- Checked against: Python decimal: PV of 48 payments of 450 at 5.5%/12 = 19,349.45; price = loan + 2,000 + 5,000 − 1,000; tax 8.25% × (price − 5,000)

## Questions

### How is a car payment calculated?

Find the amount financed, then apply the loan payment formula with the monthly rate. A 35,000 car with 4,000 down, a 6,000 trade-in, 2,030 of sales tax and 1,200 of fees in the loan leaves 28,230 to finance. At 7% APR over 60 months, r = 7 ÷ 1,200 and the payment is 558.99. Excel's =PMT(7%/12, 60, -28230) returns the same figure.

### Does a trade-in reduce the sales tax on a car?

In many states it does. Texas charges its 6.25% motor vehicle tax on the price minus the trade-in allowance, so a 25,000 car with a 10,000 trade-in is taxed on 15,000: 937.50 (Texas Comptroller). California gives no trade-in credit: the full 25,000 is taxed, 1,812.50 at the 7.25% statewide rate (CDTFA). Set the toggle to match your state.

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

The difference, called negative equity, is added to the new loan. Owing 11,000 on a car worth 8,000 adds 3,000. On a 30,000 car with 2,000 down, 6% tax on the 22,000 after the trade-in and 800 of fees, 33,120 is financed; at 8.5% for 72 months that is 588.82 a month and 9,275.05 of interest. The tax credit is based on the trade-in's value, not your equity in it.

### How much car can I afford with a 500 monthly payment?

At 6% APR for 60 months, 500 a month repays a loan of 25,862.78. With 3,000 down, 7% sales tax and 1,000 of fees carried in the loan, that buys a car priced up to 26,039.98. Choose "Price I can afford" and enter your own budget, rate and term to run the numbers backward.

### Is a 72- or 84-month car loan a good idea?

A longer term lowers the payment but raises the interest. Financing the default 28,230 at 7% costs 558.99 a month and 5,309.27 of interest over 60 months, 481.29 and 6,423.13 over 72 months, and 426.07 and 7,559.57 over 84 months, at the same rate.

### How accurate is the auto loan calculator?

Accuracy depends on your inputs and the method's assumptions. Decimal arithmetic uses 50 significant digits, but estimates, numerical methods and source data can be less precise; the displayed rounding does not remove those limits. It is checked against 8 worked examples whose answers come from independent sources; for example, “50,000 car, 10,000 down, tax and fees paid upfront” is checked against Calculator.net auto loan calculator, published output for these inputs (fetched 2026-09-26): 754.85 a month, 5,290.96 interest, 60,790.96 total cost.

### Where does the method come from?

Texas Comptroller — Motor vehicle sales and use tax (6.25% of sales price minus trade-in allowance); Texas Comptroller — Motor vehicle tax guide: total consideration and rebates; California Department of Tax and Fee Administration — Tax guide for motor vehicle dealers (trade-ins, rebates, fees); Consumer Financial Protection Bureau — Auto loans: what to know before you buy; Microsoft Excel PMT and PV functions.

## Sources

- [Texas Comptroller — Motor vehicle sales and use tax (6.25% of sales price minus trade-in allowance)](https://comptroller.texas.gov/taxes/motor-vehicle/sales-use.php)
- [Texas Comptroller — Motor vehicle tax guide: total consideration and rebates](https://comptroller.texas.gov/taxes/publications/96-254/total-consideration.php)
- [California Department of Tax and Fee Administration — Tax guide for motor vehicle dealers (trade-ins, rebates, fees)](https://cdtfa.ca.gov/industry/motor-vehicle-dealers/industry-topics.htm)
- [Consumer Financial Protection Bureau — Auto loans: what to know before you buy](https://www.consumerfinance.gov/consumer-tools/auto-loans/)
- [Microsoft Excel PMT and PV functions](https://support.microsoft.com/office/pmt-function-0214da64-9a63-4996-bc20-214433fa6441)

_Note: financial information, not professional advice._