Calculate your monthly car payment with trade-in, sales tax, and fees. See the true financed amount, total interest, and lifetime cost of your vehicle loan.
The number on the showroom whiteboard is almost always lower than what you'll actually pay. Three reasons: the quote rarely includes the dealer's documentation fee, it usually assumes you finance through their captive lender (with a marked-up rate), and it relies on a "spot" payment estimate that ignores the F&I office add-ons coming next. This calculator forces all of those numbers into the open before you sign anything.
Every U.S. auto loan starts with the same equation:
Amount Financed = Negotiated Price + Sales Tax + Title/Reg Fees − Down Payment − Trade-In Equity
Trade-In Equity is the dealer's appraisal of your old vehicle minus any payoff balance on the existing loan. If you owe more than the trade is worth — common in years 1 to 3 of a long auto loan — the negative equity is added to the new loan, immediately putting you underwater on day one of the new contract.
The financed amount then runs through the standard installment-loan formula:
M = P × r(1 + r)n ÷ ((1 + r)n − 1)
Same buyer in California — which taxes the full $34,800 — would owe sales tax of about $3,037 instead of $1,475, increasing the financed amount by $1,562 and the monthly payment by about $31. State of registration alone can reshape this calculation by several thousand dollars over the life of the loan.
In most U.S. states, vehicle sales tax is applied only to the negotiated price minus the trade-in allowance — effectively turning your trade into a tax credit. Six states are exceptions:
In the calculator above, the "Tax Trade-In?" dropdown switches the math. Verify your state's current treatment with your DMV — rules change.
After you've agreed on price, you're handed to the Finance & Insurance (F&I) manager. This is the most profitable 20 minutes in the dealership, and they have a menu of add-ons ready: extended warranty, GAP insurance, paint/fabric protection, tire-and-wheel protection, dealer-arranged maintenance plans, and sometimes a "VIN etching" theft deterrent. Margins on these products are typically 50% to 200%. Treat the F&I office like a separate negotiation — politely decline anything that wasn't on your pre-approved bank's letter, and walk out if pressure escalates.
Crucially, dealers can mark up your APR by 1 to 2 percentage points above the lender's actual buy rate as a profit center (the "dealer reserve"). The fix: get pre-approved by a credit union or online lender before you visit the dealership. Bring a printed approval letter. Let the dealer try to beat it — if they can't, you use your pre-approval. If they can, you've still won.
Lenders aggressively market longer terms because the monthly payment looks affordable. The catch is a higher APR, dramatically more total interest, and a longer underwater period. Here's the comparison on a $21,333 financed amount:
| Term | Typical APR | Monthly | Total interest | Years underwater* |
|---|---|---|---|---|
| 36 mo | 6.40% | $652 | $2,144 | ~0.5 yr |
| 48 mo | 6.55% | $507 | $3,015 | ~1.2 yrs |
| 60 mo | 6.75% | $419 | $3,829 | ~2.0 yrs |
| 72 mo | 7.25% | $365 | $4,933 | ~3.1 yrs |
| 84 mo | 7.99% | $332 | $6,544 | ~4.0 yrs |
*Underwater = loan balance exceeds current vehicle value. Estimates assume 15% first-year depreciation and 10% per year thereafter.
GAP (Guaranteed Asset Protection) covers the difference between what your collision insurer pays out on a totaled car and what you still owe on the loan. Three rules of thumb:
Auto refinancing has lower friction than mortgage refi — typically no appraisal, no origination fee at most credit unions, and approval in 1 to 3 business days. The sweet spot is 12 to 18 months after origination if any of these are true:
Leasing usually wins on monthly payment, loses on total cost over 8-plus years of ownership. The break-even depends on your annual mileage, expected resale value, and whether you'll keep the vehicle past the loan term. Generally:
It uses the exact installment-loan formula required under the Truth in Lending Act and the same tax and trade-in handling your dealer's F&I system uses. The only inputs you can't perfectly predict in advance are your final negotiated price, your dealer's documentation fee, and whether the F&I office adds extras you decline.
The 20/4/10 rule says 20% down on new and 10% on used. The real reason is depreciation: new vehicles lose 15% to 20% in the first year and 50% to 60% by year five. A larger down payment keeps you above water faster.
No, but most buyers do because it's the only way to escape an underwater trade without paying out of pocket. Better option: keep driving the old vehicle until equity is positive, or pay the gap in cash at signing.
Almost always, yes. Credit unions averaged about 0.6 to 1.0 percentage points lower than retail banks on auto loans in 2025 Federal Reserve data. Online lenders (Lightstream, Capital One Auto, Autopay) often beat both.
Use this calculator twice: once with the rebated price and your bank's APR, once with the full price and 0% APR. Whichever produces a lower total of payments (including rebate) wins. Sub-$20,000 financed amounts usually favor 0% APR; larger amounts usually favor the rebate.
Personal-use auto loan interest is not deductible. Business-use vehicles can deduct a portion of interest in proportion to business mileage on Schedule C or Form 2106.
Only if they're offering subvented (subsidized) rates — typically 0% to 2.9% APR promos. Their standard rates without a subvention are usually no better than a credit union's offer.
Driver's license, proof of insurance, your pre-approval letter from a bank or credit union, and (if trading in) your current vehicle's title or payoff information from your existing lender.
Editorial note: This calculator and content are for educational use only and do not constitute legal, tax, or financial advice. Always confirm your specific state's tax treatment with the DMV and review the final dealer contract line by line before signing. Last reviewed by Marcus Tan, CPA, on February 22, 2026.