How to Calculate a Car Loan Payment (Taxes, Fees and Trade-In)

Published October 12, 2026

Free tool: Auto Loan Calculator→

The sticker price is only the starting point of a car loan. Sales tax, registration fees, your down payment and your trade-in all change how much you borrow, and the loan term changes how much interest you pay on it. This guide works through a realistic example and shows how to use the free Auto Loan Calculator.

Step 1: Work out the amount financed

Amount financed = price − down payment − trade-in equity − rebates + sales tax + fees (when taxes and fees are rolled into the loan)

Example: a $30,000 car, $3,000 down, 7% sales tax and $800 in title, registration and fees:

• Sales tax: 7% × $30,000 = $2,100
• Amount financed: $30,000 − $3,000 + $2,100 + $800 = $29,900

Step 2: Work out the payment

At 6.5% APR for 60 months, $29,900 costs $585.03 a month. Over the loan you'd pay $5,201.67 in interest, so the car's total cost, including the down payment, comes to about $38,102.

How the term changes the cost

Stretching to 72 months saves about $82 a month but costs over $1,000 more in interest, and you're more likely to owe more than the car is worth for longer, since cars lose value quickly in their first years.

Trade-ins and sales tax

Your trade-in's equity is its value minus anything you still owe on it. A car worth $8,000 with $3,000 left on its loan gives $5,000 of equity. In many US states, sales tax is charged only on the price after the trade-in credit, which saves tax too. In the example, that $5,000 of equity brings the tax down to $1,540, the amount financed to $24,340 and the payment to $476.24. Check your state's rules; not every state allows the tax credit.

If you owe more on your trade-in than it's worth, the difference (negative equity) is often added to the new loan, which raises the payment and the interest.

How to use the Auto Loan Calculator

1. Open the Auto Loan Calculator.
2. Enter the vehicle price, down payment, trade-in value and amount owed on it, and any cash rebate.
3. Enter the sales tax rate and the title, registration and fees. Choose whether tax is charged after the trade-in credit and whether taxes and fees are included in the loan.
4. Enter the interest rate (APR) and choose the loan term.
5. Read the results: the monthly payment, the amount financed, the cash due at signing, the total interest and the total cost of the car, with a comparison of terms and charts of the balance.

Tips for a cheaper car loan

• Get pre-approved by a bank or credit union before visiting the dealer, so you can compare their financing offer.
• Negotiate the price, not the payment. A low payment can hide a long term or a high price.
• Keep the term as short as you can afford; 48 to 60 months is a common target.
• Put more down to borrow less and avoid owing more than the car is worth.
• Check the total budget with the Car Affordability Calculator, or compare with leasing using the Car Lease Calculator.

Frequently asked questions

How do I calculate a car loan payment?

Work out the amount financed (price minus down payment and trade-in equity, plus tax and fees), then apply the loan payment formula with the monthly rate and number of months. $29,900 at 6.5% for 60 months is $585.03 a month.

Should I roll taxes and fees into the loan?

It reduces the cash you need upfront, but you pay interest on them. If you can pay them in cash, the loan is smaller and cheaper.

Is a 72-month car loan a bad idea?

It isn't always bad, but it costs more interest and keeps you owing more than the car is worth for longer. Take it only if a shorter term's payment truly doesn't fit, and consider a cheaper car instead.