Auto Loan Calculator: Estimate Your Car Payment

Written by HonestCredit Editorial Team Updated Jan 12, 2026 7 min read

Plan your monthly car payment and amount financed, including the impact of APR, loan term, state sales tax, title/registration and doc fees, cash down, rebates, and trade-in equity or negative equity. The math follows the standard fixed-rate payment formula (the same as Excel’s PMT) and the definitions lenders disclose on your Truth-in-Lending form.

If you’re already stuck with a car payment that feels too high today, start by reading our guide on how to lower your car payment without refinancing. Then come back to this calculator to plan a payment that actually fits your budget going forward.

Auto Loan Calculator

Vehicle price ($)

APR (%)

APR = rate plus certain fees, expressed as a yearly rate.

Term (months)

Cash down ($)

Rebate ($)

Reduces the negotiated price in many cases. Confirm with the dealer.

Trade-in value ($)

Amount owed on trade-in ($)

If this exceeds trade-in value, the difference is negative equity rolled into the new loan.

Sales tax rate (% of taxable price)

Rules vary by state; check your DMV or revenue department.

Title/registration & doc fees ($)

Apply trade-in as tax credit (many states)

Some states reduce the taxable base by the trade-in value; others do not. Verify locally.

Pay fees upfront (do not finance)

Monthly payment is computed using a standard fixed-rate loan formula (similar to Excel PMT). Results update automatically as you change the inputs.

Estimated monthly payment $0

Amount financed $0

Total interest (life of loan) $0

Upfront and price components $0

See amortization schedule

Month	Payment	Principal	Interest	Ending balance

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What Your Car Payment Includes (and What It Doesn’t)

Principal & Interest (P&I):
The loan payment itself (fixed for a fixed-rate auto loan). It’s calculated from the amount financed, APR, and term using the standard annuity formula.
Sales tax:
Depends on your state and often applies to the vehicle’s taxable price. Some states give a trade-in sales-tax credit that reduces the taxable base; others do not. Confirm the rules with your DMV or state tax agency.
Title/registration & doc fees:
Government and dealer fees required to title and register the car (plus the dealer’s documentation fee). You can pay these up front or roll them into the loan. Amounts and rules vary by state.
Insurance, gas, and maintenance:
Not included in the loan payment. Create a separate budget line for ownership costs — and remember that full coverage is usually required if you finance or lease.

APR vs. Interest Rate — Why APR Drives Comparisons

APR is a standardized measure of the cost of credit that includes the interest rate plus certain fees, expressed as a yearly rate. Federal Truth-in-Lending rules require auto lenders and dealers to disclose the APR, finance charge, amount financed, and total of payments before you are obligated on the loan, so you can compare offers “apples-to-apples.”

How the Calculator Works

1) Building the amount financed

Negotiated price minus any manufacturer or dealer rebates gives a net vehicle price. If your state provides a trade-in sales-tax credit, the taxable base is reduced by the trade-in value (up to the net price). The calculator then:

adds estimated sales tax and title/registration/doc fees,
subtracts your cash down payment, and
adds or subtracts trade-in equity (trade-in value minus what you still owe).

If you owe more than your trade-in is worth, the shortfall is negative equity and increases the loan amount instead of reducing it.

2) Computing the monthly payment

For a fixed-rate loan, the monthly P&I payment comes from the standard formula:

Monthly P&I = P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1]

Where P = amount financed, r = monthly interest rate (APR ÷ 12), and n = number of payments (term in months). This is the same math used by Excel’s PMT function.

3) Showing total interest and an amortization snapshot

Over the full term, total interest paid equals:

Total interest = (monthly payment × term) − amount financed

The amortization table in the calculator shows how each payment splits between interest and principal, and how fast your balance falls over time.

Step-by-Step: Estimating Your Payment

Enter the vehicle price and any manufacturer rebate.
Start with the “out-the-door” target price you’re negotiating, then subtract rebates.
Add trade-in details:
Enter what the dealer will give you for the trade and how much you still owe. The calculator handles positive equity (reduces the loan) and negative equity (adds to the loan).
Set sales tax and fees:
Use your state’s sales-tax rate and a realistic estimate for title/registration/doc fees. If your state credits trade-ins against tax, keep the toggle on; if not, turn it off. Use official DMV or revenue-department guidance for accuracy.
Choose APR and term:
Plug in quotes from banks, credit unions, online lenders, and the dealer. Shopping your loan separately (pre-approval) typically improves your negotiating position.
Decide whether to roll fees into the loan or pay up front.
Rolling fees in raises both your monthly payment and total interest; paying them up front increases your cash due at signing.

Smart Settings for 2025 Shoppers

Aim for the shortest term you can comfortably afford.
Terms of 72–84 months lower the payment but often cost much more interest and can leave you “upside down” (owing more than the car is worth) for longer. Try 48–60 months if your budget allows.
Watch negative equity.
If you’re rolling a prior balance into a new loan, consider a slightly cheaper car, a larger down payment, or waiting until you have equity so you’re not burying old debt in the new vehicle.
Focus on total cost, not just the monthly payment.
Regulators warn that focusing only on the monthly number can hide a higher price, extra products you don’t need, or an unnecessarily long term. Compare APR, amount financed, and total of payments across offers.

Example (illustrative only):
Price $35,000, rebate $1,000, trade-in $8,000 with $6,000 owed (=$2,000 equity), state tax 6% with trade-in credit, fees $450 (financed), cash down $3,000, APR 6.9%, term 60 months → the calculator estimates the amount financed, monthly payment, and total interest. Adjust any input to see the effect on your budget.

Negotiating the Deal: Evidence-Based Tips

Shop the loan before the car. Bring a credit union or bank pre-approval and invite the dealer to beat it instead of starting from the dealer’s offer.
Ask for the Truth-in-Lending figures up front. Compare APR, finance charge, amount financed, and total of payments across lenders, not just the monthly payment.
Verify taxes and fees with your state DMV or tax agency. Use official sources so your “out-the-door” estimate is realistic.
Understand tax treatment of trade-ins where you live. Many states allow a trade-in credit for sales tax; some do not. Check your state’s rules before you rely on it.

Key Formulas (Quick Reference)

Metric	Formula	Notes
Monthly P&I	P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1]	Standard fixed-rate formula (same as Excel `PMT`).
Amount financed	(Price − rebate) + tax + fees (if financed) − cash down − trade-in equity	Trade-in equity = trade value − amount owed; if negative, the shortfall becomes part of the new loan.
Sales tax	Tax rate × taxable base	The taxable base may be reduced by a trade-in in many states; verify with your DMV or state revenue department.
Total interest	(Monthly payment × term) − amount financed	Shows the lifetime cost of borrowing for this loan.

Methodology & Disclosures

Calculator math: Fixed-rate payment via the standard annuity formula; taxes and fees modeled per user inputs with an option to apply a trade-in tax credit, depending on state rules.
Data sources: Definitions and disclosures from the CFPB (APR, Truth-in-Lending) and buying guidance from the FTC and state DMV/DoR examples. Always rely on your own state’s official publications for final numbers.
Education only: This article doesn’t provide financial, tax, or legal advice. Verify all numbers on your retail installment sales contract or loan agreement and consult a qualified professional if you need personalized guidance.

Frequently Asked Questions (FAQs)

What’s the difference between APR and the interest rate?

The interest rate is just the cost of borrowing. APR includes the rate plus certain fees, expressed annually, so it’s better for comparing auto loan offers across lenders.

Does trading in a car reduce sales tax?

In many states, yes — your trade-in reduces the taxable price. Other states don’t allow a credit. Check your state’s official DMV or tax-agency guidance before you assume a tax break.

Should I roll fees into the loan?

Rolling fees into the loan raises both your monthly payment and total interest. If you can comfortably pay fees up front, it usually lowers the overall cost of borrowing.

Where should I get financing?

Compare offers. The CFPB and FTC both suggest shopping with banks and credit unions, then letting the dealer try to beat your pre-approval instead of starting from the dealer’s first offer.

Sources