Auto Loan Calculator
Car payment with sales tax, trade-in equity, negative-equity rollover, fees and APR.
| Month | Payment | Principal | Interest | Balance |
|---|
Formulas:
- Tax base:
max(0, price − tradeIn). Tax:taxRate × taxBase. - Negative equity:
max(0, payoff − tradeIn)(zero when payoff is blank or ≤ trade-in). - Amount financed:
price + tax + fees − down − tradeIn + negEquity. - Monthly payment:
PMT = financed × r / (1 − (1 + r)−n)wherer = apr / 12,n = months; falls back tofinanced / natr = 0. - Total interest:
PMT × n − financed. Total of payments:PMT × n.
How an auto loan payment is built
The financed amount, step by step
The lender doesn't finance the sticker price — it finances the net amount you actually need to borrow. Start with the vehicle price, add the sales tax (on price minus trade-in, so a generous trade-in shrinks the tax base), add fees (doc, title, dealer add-ons), subtract your cash down and your trade-in equity, then add any negative-equity rollover from your payoff loan. The result is the financed amount the monthly payment formula runs on. On the worked example that is 30,000 + (6% × max(0, 30,000 − 5,000)) + 500 − 3,000 − 5,000 = 24,000.00.
Why sales tax is computed on price minus trade-in
In most US states the taxable base for a car purchase is the net price the buyer pays — that is the vehicle price minus the trade-in equity applied to the deal. Trading in a $5,000 car therefore shrinks the tax base by $5,000 (and the tax bill by 6% × 5,000 = $300 in the example). A handful of states tax the full sticker regardless of trade-in; check your state's rules before relying on the calculator's default. The default convention (tax base = max(0, price − trade-in)) matches the majority of US states.
Negative equity and how it rolls into the new loan
If you still owe more on your current car loan than the dealer offers you as a trade-in, the gap is called negative equity and it rolls into the new loan. Set the Trade-In Value to what the dealer offers and the Payoff to what you still owe; the gap (payoff − trade-in, floored at zero) is added to the financed amount. On the same $30,000 car with the same $5,000 trade-in but a $7,000 payoff, the negative equity is $2,000 and the financed amount rises from $24,000.00 to $26,000.00 — the monthly payment climbs from $475.23 to $514.83 at 7%/60 months. Rolling negative equity into a new car loan costs roughly the gap plus the interest it accrues over the new term.
Reading the amortization schedule
Expand Show amortization schedule to see every month's split. The first payment of $475.23 contains interest on the full financed amount (24,000 × 0.07/12 = $140.00) and principal of $335.23. By the final payment almost everything goes to principal and the balance lands at zero. The chart above plots the declining balance and the cumulative interest — the area between the two lines is the total cost of borrowing.
How term length affects what you pay
Stretching the term from 60 to 72 months at 7% APR on the $24,000 financed amount drops the monthly payment from $475.23 to $409.18 (about $66.05 less per month) but raises the total interest from $4,513.73 to $5,460.68 — the longer schedule accrues interest on a slower-declining balance. Shortening to 48 months does the opposite: $574.71 per month, $3,586.07 of total interest. Pick the shortest term whose payment you can genuinely sustain.
Auto loan payment in Excel and on a TI-84
Compute the financed amount and run it through the standard payment function:
- Excel Financed Amount: with price 30,000, down 3,000, trade-in 5,000, payoff 5,000, tax 6%, fees 500 →
=30000 + MAX(0, 30000 - 5000)*0.06 + 500 - 3000 - 5000 + MAX(0, 5000 - 5000)= 24,000.00. - Excel Monthly Payment:
=PMT(7%/12, 60, -24000)= $475.23. - Excel Total Interest:
=475.23*60 - 24000= $4,513.73. Total of payments:=475.23*60= $28,513.73. - TI-84 TVM Solver Steps:
- Press
APPS, choose1:Finance…, then1:TVM Solver…. - Enter
I% = 7,PV = 24000,FV = 0,N = 60,P/Y = 12,C/Y = 12. - Cursor on
PMT, pressALPHAthenENTER(SOLVE) → −475.23.
- Press
- Negative-Equity Variant: change payoff from 5,000 to 7,000 and the financed amount rises to 26,000.00; the same TVM Solver with
PV = 26000returns −514.83 per month.
Worked examples
Example 1: $30,000 car, $3,000 down, $5,000 trade-in, 6% tax, $500 fees, 7% APR, 60 months
Enter price = 30000, downPayment = 3000, tradeIn = 5000, tradeInPayoff = 5000, taxRate = 6, fees = 500, apr = 7, months = 60. Tax base = 25,000, tax = 1,500, negative equity = 0. Amount financed: $24,000.00; monthly payment: $475.23; total interest: $4,513.73; total of payments: $28,513.73.
Example 2: same car, but the trade-in has $2,000 of negative equity
Keep every input, change tradeInPayoff = 7000 (the trade-in value stays at 5,000). The 2,000 gap rolls into the loan. Amount financed: $26,000.00; monthly payment: $514.83; total interest: $4,889.87; total of payments: $30,889.87. The negative-equity $2,000 itself costs about $376 of interest over the 60-month term.
Example 3: zero-interest dealer financing, 36 months
Enter price = 25000, downPayment = 2500, tradeIn = 0, tradeInPayoff = 0, taxRate = 6, fees = 300, apr = 0, months = 36. Tax base = 25,000, tax = 1,500, financed = 25,000 + 1,500 + 300 − 2,500 = $24,300.00. At r = 0 the monthly payment is straight division: $675.00. Total interest: $0.00; total of payments: $24,300.00. Zero-interest deals are exactly that — the price of the car has to be reasonable for the math to be a deal.
Related tools
The Auto Loan Calculator answers "what's the monthly payment on this car?". Related questions:
- "How much can I borrow at a given payment?" — the Mortgage Affordability Calculator runs the same formula backwards; on a car loan the same payment/rate/term math applies if you ignore the home-specific extras.
- "What if I prepay the loan?" — extra payments shorten the term and cut interest; see the Early Payoff Calculator.
- "What if I take a different repayment structure?" — the Fixed-Principal Loan Calculator models straight-line amortization (constant principal, declining payment) for comparison.
- "What's the pure loan payment without tax and fees?" — the Loan / Mortgage Calculator handles generic principal+rate+term math.
Frequently asked questions
How is the monthly payment on a car loan calculated?
Compute the financed amount: price + tax (rate × max(0, price − trade-in)) + fees − cash down − trade-in + negative-equity rollover. Then PMT = financed × r / (1 − (1 + r)−n) where r = apr / 12 and n = months. On a $30,000 / 7% / 60-month deal with $3,000 down, $5,000 trade-in (no payoff), 6% tax and $500 fees, the financed amount is $24,000.00 and the monthly payment is $475.23.
Why is the sales tax base price minus trade-in?
In most US states sales tax applies to the net price the buyer pays — that is the vehicle price minus the trade-in equity applied. A handful of states tax the full sticker; check your state's rules. The calculator's default convention is the majority rule.
What is negative equity?
The gap between what you still owe on your current car loan and what the dealer offers for the trade-in. If the payoff is $7,000 and the trade-in is $5,000, the $2,000 gap rolls into the new loan. On the $30,000 example this raises the financed amount from $24,000.00 to $26,000.00 and the monthly payment from $475.23 to $514.83.
Does the term mean months or years?
Months. Car loans run 36, 48, 60, 72 or 84 months. The amortization schedule and balance chart both run month by month. If you see an APR quoted yearly and a term in months, divide the APR by 12 for the monthly rate used in the formula.
What does total of payments include?
The sum of every monthly installment over the full term — both the principal and the interest. For the worked example it is $28,513.73, of which $24,000.00 is principal and $4,513.73 is interest.
Can I see the month-by-month breakdown?
Yes. Expand Show amortization schedule to see every payment split into interest (balance × monthly rate) and principal, with the remaining balance after each payment. The chart above plots the declining balance over the term.