# Auto Loan Calculator Estimate monthly car payments, total financing cost, and interest owed based on vehicle price, down payment, and loan term. --- - **Canonical URL:** https://dothecalculation.com/calculators/auto-loan-calculator - **Category:** Financial calculators - **Publisher:** Do The Calculation (https://dothecalculation.com) - **Cost:** Free, no account or sign-up required - **Privacy:** Runs entirely in the browser; inputs are never sent to a server - **Methodology:** https://dothecalculation.com/methodology --- ## Auto Loan Calculator — Monthly Payment and Amount Financed Estimate auto loan payments, sales taxes, registration fees, amount financed, and lifetime borrowing interest from the vehicle price. - Financed amount calculation - Taxes and dealer fee integration - Auto loan amortization schedule ## How to Use This Calculator Enter the vehicle price, down payment, trade-in value, annual interest rate, loan term in months, sales tax rate, and any dealer fees. The calculator adds sales tax and fees to the vehicle price, subtracts your down payment and trade-in value to find the amount financed, then applies standard loan amortization to return your monthly payment and total interest. ## Worked Example: $35,000 Vehicle, $7,000 Down Vehicle price $35,000, down payment $7,000, no trade-in, 6.5% annual interest rate, 60-month term, 7% sales tax, $300 in dealer fees. Sales tax amount: $35,000 × 7% = $2,450. Total vehicle cost: $35,000 + $2,450 + $300 = $37,750. Amount financed: $37,750 − $7,000 (down payment) = $30,750. Monthly payment: ≈ $601.66. Total interest over 60 months: ≈ $5,349.54. Total cost of the vehicle including tax, fees, and interest: ≈ $43,099.54 — about 23% more than the original $35,000 sticker price once taxes, fees, and financing are all included. ## The Components of a Car Purchase Transaction An auto loan is a secured installment agreement backed by the vehicle as collateral. To calculate the true monthly cost of a car, you must combine the vehicle price with local taxes, dealer fees, finance rates, and term lengths. **Vehicle Price**: The negotiated price of the car (often referred to as the out-the-door price, excluding financing costs). **Down Payment & Trade-In**: The cash down payment plus the net trade-in value of your current car. Both directly reduce the principal balance you need to borrow. **Sales Tax & Registration**: Local sales taxes and state title/registration fees. Dealers often roll these fees directly into the loan, meaning you pay interest on taxes. **Dealer Fees**: Document fees (doc fees), prep fees, or destination charges. Always check these charges, as they can inflate the loan principal. ## The Auto Loan Amortization Formula The monthly payment is calculated using the standard amortizing loan formula, applied to the Net Financed Amount: $$PMT = A_{\text{financed}} \times \frac{r(1 + r)^n}{(1 + r)^n - 1}$$ Where the Net Financed Amount is calculated as: $$A_{\text{financed}} = \text{Vehicle Price} + \text{Sales Tax} + \text{Dealer Fees} - \text{Down Payment} - \text{Trade-In Value}$$ This formula shows why trading in a car with negative equity (owing more than the car is worth) inflates the payment. The negative balance is added to the new loan, increasing the financed amount. ## The Risk of Long-Term Auto Loans (Negative Equity) In recent years, 72-month and 84-month auto loans have become common as buyers seek lower monthly payments. However, vehicles are depreciating assets that lose value rapidly. Taking out a long-term loan increases the risk of becoming **upside down** (owing more on the loan than the vehicle is worth). If the car is totaled in an accident or you need to sell it, you will have to pay the lender cash to cover the negative equity gap. ## Negotiating the Out-The-Door Price vs. Monthly Payment Dealers often focus the negotiation strictly on the "monthly payment." By stretching the loan term or hiding fees, they can meet your monthly payment target while increasing the total cost of the vehicle. Always negotiate the **Out-The-Door (OTD) Price** first. Once the OTD price is finalized, evaluate financing terms, APR, and total interest separately to ensure you get the best deal. ## Related Calculators Before signing, confirm this payment fits your budget with the [car affordability calculator](/calculators/car-affordability-calculator), and compare the total cost of financing against leasing with the [lease vs. buy calculator](/calculators/lease-vs-buy-calculator). ## Frequently asked questions ### Does the calculator include sales tax? Yes. The calculator applies your local sales tax rate to the vehicle price and adds it to the total loan principal before down payment subtractions. ### What is the "Out-The-Door" price? The Out-The-Door (OTD) price is the total cost to purchase the vehicle, including the car price, sales tax, dealer doc fees, registration, and title fees, before financing. ### Why is the amount financed different from the vehicle sticker price? The amount financed is the actual balance borrowed. It includes the vehicle price, taxes, and fees, minus your down payment and net trade-in credit. ### Should I choose a 72-month or 84-month car loan? Avoid long terms if possible. While they lower the monthly payment, they keep you in debt longer, increase lifetime interest, and increase the risk of negative equity. ### What is negative equity on a trade-in? Negative equity (being "underwater") means you owe more on your current car loan than the vehicle's actual trade-in value. This deficit is typically rolled into the new loan. ### What is GAP insurance and do I need it? Guaranteed Asset Protection (GAP) insurance covers the difference between the actual cash value of the vehicle and the remaining loan balance if the car is totaled or stolen. ### How much should I put down on a car? A standard recommendation is to put down at least 20% on a new car and 10% on a used car to offset initial depreciation and reduce monthly borrowing costs. ### What are dealer doc fees and are they negotiable? Document fees cover the administrative cost of processing the purchase paperwork. The fee itself is rarely negotiable, but you can negotiate the car price down to offset it. ### Can I refinance an auto loan? Yes. If interest rates have dropped or your credit score has improved since you purchased the car, you can refinance the auto loan to lower your rate and payment. ### How does a co-signer help with an auto loan? A co-signer with good credit shares legal responsibility for the loan, helping buyers with limited credit histories qualify for approval and lower interest rates. ## Related concepts - **Amount Financed** — The total loan principal borrowed after adding taxes/fees and subtracting cash down/trade-in. - **GAP Insurance** — Coverage that pays the difference between the vehicle value and the remaining loan balance in a total loss. - **Negative Equity** — The financial state of owing more on a vehicle loan than the asset's current market value. ## Related guides - [Auto Loan Financing: Compare Payment and Total Cost](https://dothecalculation.com/blog/finance/auto-loan-financing-strategies) — Compare auto financing by amount financed, annual rate, term, monthly payment, and total interest, then include ownership costs outside the loan. - [Loan Payment Guide: Formula, Interest, and Total Cost](https://dothecalculation.com/blog/finance/loan-payment-guide) — Learn how fixed loan payments are calculated, why term length changes total interest, and how the DTC loan calculator matches amortization math. ## Related calculators - [Car Affordability Calculator](https://dothecalculation.com/calculators/car-affordability-calculator) — Find a realistic car budget based on your income, monthly expenses, and down payment to avoid overspending on a vehicle. - [Student Loan Calculator](https://dothecalculation.com/calculators/student-loan-calculator) — Estimate student loan monthly payments, total interest paid, and payoff timeline based on your balance, rate, and repayment term. - [Loan Calculator](https://dothecalculation.com/calculators/loan-calculator) — Calculate loan payments, total interest cost, and the full payoff schedule for personal, auto, or business loans in seconds. - [Payment Calculator](https://dothecalculation.com/calculators/payment-calculator) — Find your exact monthly loan payment instantly from the loan amount, repayment term, and interest rate you enter into the tool. - [Simple Interest Calculator](https://dothecalculation.com/calculators/simple-interest-calculator) — Calculate simple interest, the final amount owed, and total repayment amount based on your principal, rate, and loan term. - [Down Payment Calculator](https://dothecalculation.com/calculators/down-payment-calculator) — Plan the savings needed for a home down payment and see how it affects your loan amount and monthly mortgage payment size. --- _This tool is for educational purposes only. Debt repayment schedules, interest accruals, auto loan terms, student loan programs, and credit card minimum payments depend on individual credit profiles, lender underwriting policies, and contract terms. Always consult a certified financial planner, credit counselor, or lending professional before making major debt consolidation or borrowing decisions._ --- _Source: [Do The Calculation](https://dothecalculation.com/calculators/auto-loan-calculator). Quote freely with attribution and a link to this page._