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Calculate your monthly car payment for a new or used vehicle purchase with taxes, fees, and trade-in.
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When you finance a vehicle, the lender divides the total borrowed amount into equal monthly installments using an amortization formula. Each payment is part principal (paying down the loan) and part interest (the lender's fee for the loan).
Your total loan amount is the vehicle price minus your down payment and trade-in equity, plus sales tax and fees. A larger down payment or shorter term reduces total interest paid.
M = P [ r(1 + r)^n ] / [ (1 + r)^n - 1 ] M = Monthly Payment, P = Principal, r = Monthly Interest Rate, n = Number of Months
Financial experts recommend keeping your total car expenses (payment, insurance, fuel, maintenance) under 15-20% of your monthly take-home pay. For someone earning $5,000/month after taxes, that means a car payment under $600-750.
No. A longer term lowers your monthly payment but dramatically increases total interest paid. A 72-month loan at 6.5% costs thousands more in interest than a 48-month loan at the same rate.
Many buyers roll sales tax into the loan to reduce upfront costs. This calculator shows both the tax amount and the financed total so you can decide. Paying tax upfront saves interest.