Calculate your monthly car loan payment, total interest, and true cost including state sales tax and trade-in value. Compare car loan rates and terms — free auto loan calculator.
Monthly payment, total cost & trade-in
This auto loan calculator shows you the true cost of financing a vehicle — not just the monthly payment. Enter your vehicle price, down payment, state sales tax rate, and the dealer's quoted interest rate to see what you'll actually pay over the life of the loan. State sales tax rates vary widely across the US: Tennessee charges 7%, California 7.25%, while Montana and New Hampshire have no sales tax at all — these differences add hundreds or thousands to the financed amount. Always calculate total out-of-pocket cost, not just monthly payment, when comparing car loan deals.
In 2026, the average new car loan rate is approximately 7%–9% for borrowers with good credit, with rates falling to 5%–6% for excellent-credit buyers who shop at credit unions or use manufacturer financing promotions. A $35,000 loan at 7.5% for 60 months costs $701/month and $7,056 in total interest; the same loan at 5.5% saves you over $2,100 in interest over the term. Shopping your financing before visiting the dealership — getting pre-approved at a bank or credit union — puts you in a far stronger negotiating position and almost always gets you a better rate than dealer-arranged financing.
Average new car rates: 5%–8.5% (excellent credit), 9%–13% (good credit). Used car rates run 1%–3% higher. Credit unions consistently beat dealership financing by 1%–2% — always compare before signing.
Your state's sales tax is added to the vehicle price and often financed. At 8% tax, a $30,000 car costs $32,400 before fees. California, Illinois, and Texas buyers feel this significantly; Oregon, Montana, and NH buyers don't pay any sales tax.
Putting 20% down prevents going "underwater" — owing more than the car is worth. For a $30,000 vehicle, $6,000 down. Gap insurance covers the shortfall if you can't manage 20% and the car is totaled in the first two years.
Longer terms (72–84 months) lower monthly payments but cost significantly more in total interest. A $30,000 loan at 7.5%: 60-month = $601/mo ($6,051 interest) vs 84-month = $460/mo ($8,616 interest) — $2,565 more paid.
A car loan uses the same amortization formula as a mortgage over a much shorter term, which changes the economics in two ways. Because the term is short the interest total stays modest even at high rates, but because the payment is compressed into few months it is large relative to the amount borrowed. The bigger risk is not interest but depreciation: a new car typically loses value faster than a long loan repays principal, so a 72- or 84-month term can leave you owing more than the vehicle is worth for years — negative equity that follows you into the next purchase.
M = P × [ i(1 + i)^n ] ÷ [ (1 + i)^n − 1 ]Amount financed P = price − down payment − trade-in + tax, title and feeswhere:
Assumptions: Assumes a simple-interest loan with no prepayment penalty, which covers most US auto finance. Dealer add-ons and negative equity rolled from a previous loan increase P and are the usual reason a quoted payment exceeds expectations.
A $36,000 vehicle with $4,000 down, financed for 60 months at 7.2% APR.
Result$636.66 a month — $6,200 of interest
Stretching the same loan to 84 months drops the payment to about $486 but raises total interest to roughly $8,832, and by month 36 the balance would still exceed a typical trade-in value. The lower payment is bought with both more interest and more depreciation risk.