Car Payment Calculator
Calculate monthly car loan payment including tax and interest.
This tool is for informational and educational purposes only. It is not a substitute for professional financial, medical, legal, or engineering advice. See Terms of Service.
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Request a ToolHow to Use the Car Payment Calculator
Before you walk into a dealership, know your monthly payment target. This calculator shows your exact payment based on the actual numbers, so you can negotiate with confidence instead of letting the finance manager quote you a monthly payment without revealing the true cost.
- Enter the vehicle price. Use the out-the-door price you have negotiated, not the sticker price. Avoid working backward from a monthly payment.
- Enter your down payment. Larger down payments reduce your loan amount, monthly payment, and total interest paid. Most financial advisors recommend 10-20% down.
- Enter your APR. Check your pre-approved rate from your bank or credit union before visiting a dealership. Dealer financing is often higher. Even a 1% rate difference on a $30,000 loan over 60 months costs over $800 extra in interest.
- Add sales tax. Many states finance the sales tax into the loan. Enter your state's tax rate to see the true financed amount.
About the Car Payment Calculator
Monthly car payments use standard loan amortization: principal times monthly rate times (1 plus rate)^n, divided by ((1 plus rate)^n minus 1). Each payment includes both principal and interest, with more going to interest early in the loan. A $27,000 loan at 6.5% APR for 60 months results in a $527.33 monthly payment, $31,640 total paid, and $4,640 in total interest. The longer the loan term, the lower the payment but the higher the total interest.
Frequently Asked Questions
What is a good car loan interest rate?
As of 2025, average new car loan rates range from 5-9% APR depending on credit score. Used car rates are typically 1-3% higher. Buyers with excellent credit (720+) can often qualify for 4-6% APR from credit unions and banks. Dealer financing is often 1-2% above what you can get from your own bank. Always get pre-approved before visiting a dealership.
Should I take a longer or shorter loan term?
Shorter terms mean higher monthly payments but significantly less total interest. A 48-month loan versus a 72-month loan on the same amount typically saves $1,500-$3,000 in interest. The risk of a 72-month loan is being "underwater" on the car, meaning you owe more than it is worth, for longer. Most financial advisors recommend the shortest term you can comfortably afford.
How much car can I afford?
A common guideline is the 20/4/10 rule: 20% down payment, loan term of 4 years or less, and total vehicle expenses (payment + insurance) at 10% or less of gross monthly income. If you earn $5,000/month, total car expenses should not exceed $500. This keeps transportation from consuming too large a share of your budget.
Does this calculator include sales tax?
Yes. Enter your state sales tax rate in the Sales Tax field and the calculator adds it to the vehicle price before computing the loan. Sales tax rates vary from 0% (some states) to 10%+ (some localities). Many buyers roll the sales tax into the financed amount, which is reflected in the loan amount shown in the breakdown.