Auto Loan Calculator

Enter the vehicle price, your down payment and trade-in, the sales tax rate and the loan's APR and term, and the calculator returns the monthly payment along with three figures dealers rarely put side by side: the amount financed, the total interest, and the total cost of the car once tax and interest are counted. The monthly payment is the headline number, but the total cost line is the one to compare across offers, because a payment that looks smaller can hide a larger amount financed or a longer term. A toggle controls how sales tax is applied, since some places tax the full price while others tax only the price after the trade-in.

How the payment is calculated

The calculator first works out the amount financed, the sum that actually accrues interest:

P = price − down payment − trade-in + sales tax

Sales tax is taken at the rate you enter, applied either to the full price or to the price minus the trade-in depending on the toggle, and the model assumes the tax is rolled into the loan rather than paid in cash at signing. From there the payment follows the standard amortization formula behind any fixed-rate installment loan:

A = P × i × (1 + i)ⁿ ÷ ((1 + i)ⁿ − 1)

Here i is the monthly rate, the APR divided by 1,200, and n is the term in months. At exactly zero percent the formula reduces to P ÷ n, the amount financed split into equal parts. Total interest is the payment times the number of months minus the amount financed, and the total cost of the car is the price plus the tax plus that interest. The down payment and trade-in are part of how you pay, not a discount on what the car costs, which is why they do not reduce the total cost line.

A worked example

Take a 30,000 car with 4,000 down and a trade-in worth 3,000, in a jurisdiction where the trade-in lowers the taxed amount, with 6 percent sales tax, a 7.14 percent APR and a 60-month term. Tax applies to 30,000 − 3,000 = 27,000, so the tax is 1,620. The amount financed is 30,000 − 4,000 − 3,000 + 1,620 = 24,620. The monthly rate is 7.14 ÷ 1,200 = 0.00595, and 1.00595 raised to the 60th power is 1.42752, so the payment is 24,620 × 0.00595 × 1.42752 ÷ 0.42752 = 489.13 a month. Sixty payments of that size total 29,348.00, which puts the interest at 4,728.00 and the total cost of the car at 30,000 + 1,620 + 4,728 = 36,348. Flip the toggle so tax applies to the full price and the tax rises to 1,800, the amount financed to 24,800, and the payment to 492.71 — about 3.58 more a month, or roughly 215 over the term, for the same car.

How Americans came to buy cars on credit

Paying for durable goods in installments is older than the car. Encyclopedia.com's history of installment buying credits the furniture firm Cowperthwaite and Sons with introducing consumer installment selling in 1807, has the Singer Sewing Machine Company selling its machines on time by about 1850, and records that installment financing of car purchases began in 1910. In 1915, the same account notes, the Guarantee Securities Company began buying consumers' installment notes from Willys-Overland dealers, turning those IOUs into a business of their own; by the end of 1917 about twenty-five companies were financing automobiles, and by 1925 roughly 1,700 were.

The decisive push came from a carmaker. In 1919 General Motors founded the General Motors Acceptance Corporation, GMAC, to lend car buyers the money that banks at the time largely would not, which put the manufacturer itself into the lending business. Credit then spread through the 1920s at remarkable speed. The online history textbook at ushistory.org records that over half of the nation's automobiles were sold on credit by the end of the decade and that consumer debt more than doubled between 1920 and 1930; an American RadioWorks history of consumer credit puts the installment share of car purchases above two-thirds by 1930, alongside most appliances, radios and furniture. Estimates of the exact share vary, but by the late 1920s a large majority of new cars were bought on time.

Henry Ford held out. He disliked consumer debt, and his company's rival Weekly Payment Plan, which asked buyers to save toward the purchase rather than borrow, failed; General Motors meanwhile overtook Ford as the leading American carmaker. Ford relented in 1928, when Edsel Ford and Ernest Kanzler established the Universal Credit Corporation to finance Ford purchases, and Henry Ford reportedly sold it in 1932 for 50 million dollars to raise cash during that year's banking crisis. By the mid-1970s, Encyclopedia.com's account records, the major auto finance companies were all factory-owned subsidiaries — GMAC, Ford Motor Credit and Chrysler Financial — and GMAC itself rebranded as Ally Financial in May 2010.

Term creep, from twelve months to seventy

The terms behind those early loans would look severe today. Encyclopedia.com's account of the trade records that in 1924 the National Association of Finance Companies adopted standards of at least one-third down on a new car, two-fifths on a used one, with a maximum term of twelve months. The same account has maturities lengthening to eighteen months by 1937 and twenty-four months by 1952, and they have been stretching ever since. According to Experian's State of the Automotive Finance Market report for the first quarter of 2026, the average new-vehicle loan term reached 69.48 months, and the share of new-vehicle loans running longer than six years hit 35.55 percent, up from 30.83 percent a year earlier; used-vehicle loans are nearly as long, averaging 67.73 months. The sums have grown with the terms: the same report puts the average new-vehicle loan at 43,925 dollars, up 2,150 year over year, with average monthly payments of 770 dollars for new vehicles and 531 for used. Experian's Melinda Zabritski ties the two trends together: "While shoppers continue to lean toward larger, more expensive vehicles, we're seeing more consumers take advantage of longer-term loans to offset rising monthly costs." The debt behind those averages reached 1.71 trillion dollars in the second quarter of 2026, per the New York Fed's household debt report. On rates, the Federal Reserve's G.19 consumer credit release shows commercial banks averaging 7.14 percent on 60-month new-car loans and 6.97 percent on 72-month loans in the second quarter of 2026, preliminary figures that are revised as the data settles. Those are simple averages of each bank's most common rate, not quotes: credit score, term, lender type and new versus used all move the number.

Why the longer term costs more

Stretching the term is how a payment gets squeezed into a budget, and it always raises the total bill. Finance 30,000 at 7 percent over 60 months and the payment is 594.04, with about 5,642 of interest over the life of the loan. The same 30,000 at the same rate over 72 months drops the payment to 511.47, roughly 83 a month easier, but pushes the interest to about 6,826, because the balance stays outstanding for an extra year. Twelve extra payments buy about 1,184 of additional interest on an identical car.

The arithmetic also hides a second cost. A longer term retires principal more slowly, so the balance stays high for more of the loan's life, and if the car's resale value falls below that balance, trading it in produces negative equity — a shortfall that is commonly rolled into the next loan. That carried-over debt, together with rolled-in tax and fees, is why an amount financed can exceed the price of the car itself, and it compounds from one purchase to the next.

Assumptions and what the estimate leaves out

The model assumes a fixed APR for the whole term, equal monthly payments that always arrive on time, and sales tax rolled into the amount financed. If you plan to pay the tax in cash at signing, set the tax rate to zero and the result reduces to a plain loan on the price minus your down payment and trade-in. Documentation fees, title and registration charges and dealer add-ons are not modeled separately; fold them into the vehicle price if you want them financed. The tax toggle exists because jurisdictions differ on whether a trade-in reduces the taxed amount; check your own state or country rather than assuming either setting. The Experian and G.19 figures quoted above describe averages among financed vehicles in a single quarter and will drift with every release. Nothing here accounts for insurance, fuel, maintenance or depreciation, and none of it is financial advice; confirm the exact figures against the lender's own disclosure before signing.

Results are estimates from the standard amortization formula and exclude fees, insurance, registration and depreciation, so confirm exact figures with your lender. See the site disclaimer.

Frequently asked questions

What is the average car payment right now?

According to Experian's automotive report for the first quarter of 2026, the average monthly payment was 770 dollars for a new vehicle, up from 748 a year earlier, and 531 dollars for a used vehicle, up from 523. Those figures describe financed vehicles only and move every quarter, so treat them as a benchmark rather than a target.

How long is the average car loan?

Experian's Q1 2026 data puts the average new-vehicle loan term at 69.48 months, with 35.55 percent of new-vehicle loans running longer than six years, up from 30.83 percent a year earlier. Used-vehicle loans average 67.73 months. For contrast, Encyclopedia.com's history of installment buying records that in 1924 the National Association of Finance Companies set an industry standard of a twelve-month maximum term with at least one-third of the price down.

What APR should I expect on a car loan?

The Federal Reserve's G.19 consumer credit release shows commercial banks averaging 7.14 percent on 60-month new-car loans and 6.97 percent on 72-month loans in the second quarter of 2026, preliminary figures from the August 2026 release. Those are simple averages of each bank's most common rate, so individual quotes range widely on both sides: your credit score, the loan term, the lender type and whether the car is new or used all move the number.

Does a longer car loan term save me money?

It lowers the payment, not the cost. Financing 30,000 at 7 percent costs 594.04 a month and about 5,642 in interest over 60 months, versus 511.47 a month and about 6,826 in interest over 72 months. The longer term frees up roughly 83 a month but adds around 1,184 to the total bill.

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

In many places sales tax applies only to the price minus the trade-in value, which cuts the tax bill, but not everywhere, and the treatment varies by jurisdiction. This calculator has a toggle for both treatments, so set it to match your local rule. In the worked example a 3,000 trade-in at a 6 percent rate saves 180 in tax.

Why is the amount financed higher than the price of the car?

Because sales tax and fees are often rolled into the loan, and because negative equity from a previous loan can be added on top. Experian's Q1 2026 average new-vehicle loan of 43,925 dollars, up 2,150 year over year, illustrates how large those financed amounts have grown. In this calculator the amount financed is the price minus down payment and trade-in, plus the tax.