A car payment depends on more than the sticker price. Sales tax and dealer fees are usually rolled into the loan, while your down payment and trade-in reduce it, and any balance you still owe on the trade-in (negative equity) is added back. A $35,000 car with $5,000 down, a $3,000 trade-in, 7% tax and $500 of fees financed at 6.9% for 60 months costs $587.49 a month.
The Consumer Financial Protection Bureau's auto loan guide recommends shopping the loan separately from the car and comparing offers by APR and total cost, not just the monthly payment, because a longer term can hide a higher total price.
How to use the auto loan calculator
- Enter the negotiated vehicle price before tax.
- Enter your cash down payment, the trade-in value and anything still owed on the trade-in.
- Enter your local sales tax rate and choose whether your state gives a trade-in tax credit.
- Enter fees you will finance, then the APR and term from the lender’s offer.
Formula
Worked example
Price $35,000; $5,000 down; $3,000 trade-in with nothing owed; 7% tax on the price after trade-in; $500 fees; 6.9% APR for 60 months.
- Sales tax: ($35,000 − $3,000) × 0.07 = $2,240.
- Amount financed: $35,000 + $2,240 + $500 − $5,000 − $3,000 = $29,740.
- Payment: r = 0.069 ÷ 12 = 0.00575; 29,740 × 0.00575 ÷ (1 − 1.00575−60) = $587.49 a month.
- Total interest: $587.49 × 60 − $29,740 ≈ $5,509.
Longer terms and negative equity
Stretching the same $29,740 to 84 months drops the payment to about $447 but raises interest to about $7,842, and the car may be worth less than the loan balance for years. Rolling negative equity from an old loan into a new one makes this worse: every dollar owed on the trade-in is financed again, with interest. Try entering an amount owed to see the effect.
Whether your state taxes the full price or the price after trade-in varies. Check your state revenue department, or look up the average rate in our sales tax calculator. To budget running costs, pair this with the fuel cost calculator (gas trip cost).
Caveats and assumptions
- Trade-in tax treatment, documentation fees and title costs vary by state and dealer.
- Rebates are treated as part of the negotiated price; some states tax the price before rebates.
- Assumes a simple-interest loan with equal monthly payments starting one month after purchase.
- Optional add-ons such as extended warranties or GAP coverage increase the amount financed if rolled in.
Frequently asked questions
How much is the payment on a $30,000 car loan at 6.9% for 60 months?
About $592.62 a month. Our worked example finances $29,740, which gives $587.49.
Is sales tax included in a car loan?
Often yes: dealers usually add sales tax and fees to the amount financed unless you pay them in cash.
Does a trade-in reduce sales tax?
In most states sales tax is charged on the price minus the trade-in value, but some states tax the full price. Choose the option that matches your state.
What is negative equity on a trade-in?
Owing more on your current car than it is worth. The difference is usually added to the new loan.
Is a 72- or 84-month car loan a bad idea?
It lowers the payment but raises total interest and keeps you owing more than the car is worth for longer. Compare total cost, not just the payment.
Sources
- CFPB — Auto loans (consumer tools) — shopping for an auto loan, APR and total cost
- Tax Foundation — State and Local Sales Tax Rates, Midyear 2026 — state and average local sales tax rates
- CFPB — Regulation Z, Appendix J — APR computation for closed-end loans
This calculator gives estimates for planning and education only. It is not financial, tax or investment advice. Your lender, card issuer, employer or tax authority uses its own terms, fees and rounding, so confirm figures with them before deciding. See our disclaimer and how we build and check calculators.