Auto Loan & Car Payment Calculator
Work out your monthly car payment including down payment, trade-in value, sales tax, and dealer fees. See total interest and the full amortisation schedule.
Payment breakdown
How auto loan math works
Unlike a mortgage, most auto loans include additional costs beyond the vehicle price: sales tax on the sale, title and registration fees, dealer documentation fees. These get rolled into the amount you finance.
Amount financed = (vehicle price × (1 + tax rate)) + fees − down payment − trade-in value
Then the standard loan payment formula applies:
M = P × i / (1 − (1 + i)−n)
Common auto loan mistakes
- Extending the term to lower the monthly payment. An 84-month loan on a car you'll only keep 5 years leaves you underwater — owing more than the car is worth for years.
- Rolling negative equity into the new loan. If your trade-in is worth less than what you still owe, dealers will sometimes add that gap to your new loan. This is how people end up financing $45,000 on a $35,000 car.
- Focusing only on monthly payment. Dealers can hit almost any monthly payment target — but often by extending the term or increasing the total cost. Always look at total interest paid.
- Not shopping the loan separately. Get pre-approved from your bank or credit union first. Then you know exactly what rate to beat if the dealer offers financing.
Frequently asked questions
How is my car payment calculated?
Your monthly car payment is calculated on the amount you finance (car price + tax + fees − down payment − trade-in). It uses the same amortisation formula as a mortgage: M = P × i / (1 − (1+i)^-n), where P is the amount financed, i is the monthly interest rate, and n is the loan term in months.
How much car can I afford?
A common rule of thumb is the '20/4/10' rule: put down at least 20%, finance for no more than 4 years, and keep total transportation costs (payment + insurance + fuel) under 10% of your gross income. This keeps you out of trouble as cars depreciate rapidly.
Should I take the dealer's low-APR financing or a rebate?
It depends on the numbers. Sometimes 0% APR for 60 months costs more overall than taking a $2,000 rebate and using a 6% credit union loan. Always do the math both ways. Our calculator lets you compare scenarios instantly.
Is a longer loan term better?
A longer term (72 or 84 months) has a lower monthly payment but you pay more total interest, and you're likely to owe more than the car is worth for most of the loan (called being 'underwater'). Shorter terms (36-48 months) are safer financially even though the monthly cost is higher.
CalcOrchard is an educational tool. Actual auto loan terms depend on your credit, lender, and vehicle. Always shop rates before committing.