Car Payment Calculator
Calculate your monthly car payment and total cost of financing for any vehicle purchase.
The monthly payment is the number dealers want you focused on. The total cost including interest is the number that matters. A $32,000 car at 7.5% over 60 months costs $38,400 all-in. The same car at 84 months costs over $40,000. Those extra months feel manageable in the payment but add up significantly.
Shorter loan terms mean higher monthly payments but dramatically less interest paid. The difference between a 60-month and 84-month loan on a $32,000 car at 7.5% is over $1,700 in extra interest. The longer term is usually not worth it.
How sales tax factors in
In most states, sales tax is added to the purchase price before calculating the loan amount. A $32,000 car with 7% sales tax adds $2,240, bringing the financed amount to $34,240 minus your down payment and trade-in. Some states allow you to apply your trade-in value before calculating sales tax, which reduces the taxable amount.
The loan term decision
72 and 84-month loans are increasingly common as vehicle prices rise. The appeal is a lower monthly payment. The problem is that long-term loans keep you underwater (owing more than the car is worth) for much longer. Vehicles depreciate fastest in the first few years. A 72-month loan on a new car typically means you are upside-down for the first 3-4 years. If the car is totaled or you need to sell, you owe more than you receive.
Frequently asked questions
What is a good APR for a car loan?
APR depends on your credit score and the lender. With excellent credit (750+), rates typically range from 4-6% on new cars through a bank or credit union. Dealer financing is often higher. Used car loans run 1-2% higher than new. Shopping multiple lenders before walking into the dealership is the most effective way to get the best rate.
Should I put more money down?
A larger down payment reduces the loan amount, lowers monthly payments, reduces total interest, and helps you avoid being underwater. The conventional guidance is 20% down on a new car. If you cannot afford 20% down without depleting your emergency fund, the car may be outside your budget.