Car Loan Calculator with Sales Tax and Trade-In
Enter your vehicle price, down payment, trade-in value, annual interest rate, loan term, and local sales tax rate. The calculator applies the standard US convention — trade-in credit reduces the taxable amount before tax is computed — then solves the amortization formula to give you your exact monthly payment, total interest cost, and a month-by-month payoff schedule.
Monthly payment
$591.68
for 60 months
Loan amount
$30,240.00
Sales tax
$2,240.00
Total interest
$5,260.82
Total cost
$39,500.82
Balance over time
Amortization schedule
| Month | Interest | Principal | Balance |
|---|---|---|---|
| 12 | $137.60 | $454.08 | $24,949.67 |
| 24 | $107.19 | $484.49 | $19,305.04 |
| 36 | $74.75 | $516.93 | $13,282.38 |
| 48 | $40.13 | $551.55 | $6,856.37 |
| 60 | $3.19 | $588.49 | $0.00 |
How it works
Your monthly payment is calculated using the standard amortization formula: loan amount × monthly rate ÷ (1 − (1 + monthly rate)^−term). Each month, the interest portion is your remaining balance × the monthly rate, and the rest of the payment chips away at principal. Because the balance shrinks each month, the interest share falls and the principal share rises — that's why early payments feel like mostly interest.
Sales tax treatment varies by state and country. This calculator uses the common US convention where your trade-in value reduces the taxable amount before tax is applied. For example, on a $30,000 car with a $5,000 trade-in and 10% tax, tax is computed on $25,000 (not $30,000), saving you $500 in tax. If your state taxes the full purchase price, enter $0 for trade-in and add any tax you've already computed to the vehicle price.
Total cost of ownership shown here is vehicle price + sales tax + total interest paid — it captures what you actually spend beyond the down payment and trade-in. A longer loan term lowers your monthly payment but increases total interest, sometimes dramatically. Comparing the total-cost row across different term scenarios is the fastest way to see that trade-off in dollar terms.
Frequently asked questions
Should I finance through the dealer or a bank?+
Both options can be competitive — the key metric is the APR (annual percentage rate). Dealers sometimes offer manufacturer-subsidised rates (0% or 1.9% promotions) that are hard to beat, but for used cars or non-promotional periods, credit unions and banks often have lower rates than dealership financing arms. Get pre-approved by your bank or credit union before visiting the dealer; that gives you a concrete benchmark to compare against whatever the dealer quotes, and you can choose whichever APR is lower.
How much should I put down?+
A larger down payment reduces the loan amount, which lowers both your monthly payment and the total interest you pay. A common guideline is 20% for new cars and 10% for used, but the right amount depends on your cash reserves, the interest rate, and whether you need to avoid being "upside down" (owing more than the car is worth). Putting less down is fine if the rate is low and you want to preserve liquidity — just avoid stretching the term too long to compensate, as that compounds the interest cost.
Does a longer term save me money?+
A longer term reduces the monthly payment but increases the total interest you pay. On a $25,000 loan at 6%, a 48-month term costs about $1,575 in total interest; a 72-month term costs about $2,388 — 52% more interest for a payment that's roughly $100 lower each month. Longer terms also keep you in negative equity (owing more than the car is worth) for a greater portion of the loan's life, which is a risk if you need to sell or the vehicle is totalled. Use the shorter term you can afford comfortably.