Is sales tax always calculated on price minus trade-in?

Not everywhere — most US states tax the price after subtracting trade-in value, but a handful tax the full purchase price regardless. Check your state's rule if the estimate needs to be precise.

Why is a 72-month loan's total interest so much higher than a 60-month loan's?

The same reason any amortizing loan costs more over a longer term: interest accrues on the outstanding balance for more months, even though each individual payment is smaller.

Does a 0% promotional rate mean I pay no interest at all?

If the rate is genuinely 0%, the calculator switches to splitting the amount financed evenly across the term with no interest component — matching what a true 0% APR offer means.

What if my down payment and trade-in together exceed the vehicle's price?

The amount financed floors at $0 rather than showing a negative loan — it just means you're covering the full purchase (plus tax) upfront with no financing needed.

Can I enter a custom loan term, like 42 months?

Not directly — the Loan term field offers a fixed set of common terms from 24 to 84 months. Pick the closest one, since lenders themselves typically only offer set term lengths too.

Does the down payment reduce the taxable amount too?

No — sales tax is calculated on the vehicle price minus trade-in only, not minus your down payment. A larger down payment reduces the amount financed but not the estimated tax.

Should I use a dealer's trade-in offer or my car's private-sale value?

Enter whatever trade-in value you're actually being offered in your deal — dealer trade-in offers are typically lower than a private-party sale, so use the real figure rather than a book-value estimate if you have one.

Can this compare a 0% APR offer against a cash-back rebate?

Not directly in one pass — run the calculator twice, once with the vehicle's 0% APR offer and once with the cash-back-reduced price at its normal financing rate, then compare each scenario's total cost.

Auto Loan Calculator

About the Auto Loan Calculator

Calculates your monthly car payment from the vehicle price, down payment, trade-in value, sales tax, interest rate, and loan term, using the same fixed-rate amortizing-loan formula as the Loan EMI and Mortgage calculators.

100% Free Runs in Your Browser No Sign-Up Required

How to use it

Enter the Vehicle price, Down payment, and Trade-in value (if any).
Enter your local Sales tax rate.
Enter the Interest rate and choose a Loan term.
Read your monthly payment, amount financed, and total interest in the result panel.

Formula

Amount financed = vehicle price + sales tax − down payment − trade-in value
Monthly payment = P × r × (1+r)ⁿ ÷ [(1+r)ⁿ − 1]
P = amount financed, r = monthly interest rate, n = number of monthly payments

The same present-value-of-an-annuity formula as any other fixed-rate amortizing loan — see the Loan EMI calculator's sourcing for the underlying math. Sales tax here is estimated on the price minus trade-in, the common convention in many (not all) US states — some states tax the full price regardless of trade-in, so treat the tax estimate as approximate for your state.

Worked example

A $32,000 vehicle with a $4,000 down payment, no trade-in, 7% sales tax, financed at 7.5% over 60 months, comes to about $606/month — $30,240 financed against roughly $6,117 in total interest.

Recommendations

• A trade-in reduces both the amount financed and, in most states, the taxable amount — it's worth more toward a purchase than its cash value alone suggests.
• Shorter terms mean higher payments but meaningfully less total interest — compare 48 vs. 72 months on the same numbers.
• This estimates sales tax only — title, registration, and dealer fees vary by state and aren't included.

Frequently asked questions

No — this estimates the vehicle price, sales tax, and financing only. Title, registration, documentation, and dealer fees vary by state and dealer, so add those separately.

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