Car Loan Calculator
Dealers quote the monthly payment. This shows what the car actually costs once tax, fees and interest are all counted.
- Amount financed
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- Total interest
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- Total cost of the car
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Same car, different terms
| Term | Monthly | Total interest | Total paid |
|---|
What a car actually costs to finance
The amount you finance is the price plus sales tax and dealer fees, minus your down payment and trade-in. On a $28,000 car with $4,000 down, 6% tax and $700 in fees, you finance $26,380 — not $24,000, because tax and fees get rolled in. At 7.2% over 60 months that is a $524.85 monthly payment and $5,111 of interest. The single most useful habit when buying a car is to negotiate the total price, never the monthly payment.
Why dealers ask what payment you want
"What monthly payment are you looking for?" is the most consequential question in a car showroom, and answering it directly hands over most of your negotiating position.
Once a target payment is known, the price, the term, the trade-in value and the rate can all be adjusted to hit it — and a longer term hides a higher price completely. The table above shows the same financed amount across five terms: the monthly figure drops steadily while total interest climbs.
Negotiate the out-the-door price first, as a single number including tax and fees. Only once that is fixed should financing be discussed, and arriving with a pre-approved rate from your own bank gives you something concrete to beat.
The trouble with 72 and 84 month loans
Long car loans have become normal, and they carry a specific risk that mortgages do not: the asset falls in value much faster than the loan balance.
A new car typically loses 20% in its first year and around 60% over five. On an 84-month loan with a small down payment, you can spend three or four years owing more than the car is worth — negative equity. If the car is written off or you need to sell, you must find the difference in cash.
The conventional guideline is 20/4/10: put 20% down, borrow for no more than 4 years, and keep total transport costs under 10% of gross income. It is stricter than most people follow, and it reliably keeps you the right side of the depreciation curve.
Which dealer fees are real
| Fee | Legitimate? |
|---|---|
| Sales tax | Yes — set by your state |
| Title and registration | Yes — government charge, passed through |
| Documentation fee | Partly — real but often inflated; capped in some states |
| Destination charge | Yes — on new cars, set by the manufacturer |
| Dealer preparation | Usually not — often already covered by the destination charge |
| VIN etching, paint protection, fabric guard | Rarely worth it — high margin add-ons |
| Advertising fee | Negotiable — this is the dealer’s marketing cost |
Ask for the out-the-door price in writing before agreeing anything. Fees that appear only at signing are the ones worth challenging.
How to use the Car Loan Calculator
- Enter the vehicle price you have agreed.
- Add your down payment and any trade-in value.
- Enter the APR and choose a term.
- Set your local sales tax and the dealer fees from the quote.
Frequently asked questions
Is sales tax charged on the trade-in value?
In most US states, no — tax applies to the price after the trade-in is deducted, which is a genuine saving over selling privately. A handful of states tax the full price. This calculator uses the more common rule.
What is a good car loan rate?
It depends heavily on credit score and whether the car is new or used. Used-car rates typically run two to four percentage points above new. Getting pre-approved by a bank or credit union before visiting the dealer gives you a benchmark.
Should I take the 0% finance offer or the cash rebate?
Compare properly: work out the total paid under 0% at full price, against the rebated price financed at your own bank’s rate. On lower-priced cars the rebate often wins.
How much should I put down?
20% on a new car is the common guideline. It offsets first-year depreciation and keeps you from going underwater, which matters most in the first two years.
Does this include insurance and running costs?
No — only the loan. Insurance, fuel, tax, servicing and tyres typically add substantially to the true monthly cost of running a car.
Related tools
Last reviewed September 4, 2026. An estimate. The dealer’s finance agreement is the binding figure.