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Sales tax rules on trade-ins vary by state, and that single variable can swing your real payment more than a point of interest rate. Get the tax assumption right first, then the rest of this is arithmetic.

Details

Vehicle price ($)

Down payment ($)

Trade-in value ($)

Sales tax (%)

Interest rate (% APR)

Term (months)

Results

Monthly payment -

Amount financed -

Total interest -

Total cost -

Estimates only. Not financial advice.

Calculator by Chris Terry, Owner and Editor
Last updated July 18, 2026

Average new-car loan rate as of February 2026: 7.52% (60-month, Federal Reserve G.19); used-car average across credit tiers: 11.26% (Experian, Q4 2025). Full table on the average rates page.

The trade-in tax rule most calculators skip

In most states, sales tax on a new vehicle is charged only on the price after your trade-in is subtracted. A handful, California among them, tax the full purchase price regardless of what you're trading in. On a $32,000 car with a $10,000 trade-in at 6 percent tax, that's the difference between paying tax on $22,000 versus $32,000, or $600 either way. This tool assumes the trade-in reduces the taxable amount; if your state doesn't allow that, set trade-in to zero here and fold its value into your down payment instead, so the tax math matches your state.

Payment by term, $29,920 financed at 6.5%

Term	Monthly payment	Total interest
36 months	$917	$3,090
48 months	$710	$4,170
60 months	$585	$5,180
72 months	$503	$6,290

Stretching past 60 months buys a smaller payment but keeps you paying interest on a car that's depreciating the whole time, which is how buyers end up owing more than the car is worth.

Line up financing before the lot, not at it. A pre-approved rate from your own bank or credit union gives you a number to beat, rather than a number to hope the dealer improves.

The arithmetic behind the payment

Tax first: 6 percent of a $32,000 price minus $0 trade-in is $1,920. Amount financed is price plus tax minus down payment, so 32,000 + 1,920 - 4,000 equals $29,920. Now amortize with M = A times i over 1 minus (1 plus i) to the negative n. The monthly rate i is 0.065 divided by 12, about 0.005417, and n is 60. That produces a payment near $585 a month, and across 60 payments roughly $35,100 changes hands, about $5,180 of it interest.

Full amortization schedule

Every payment on your specific numbers, split into interest and principal.

Reading the dealer's finance menu

The finance office makes money two ways: the rate itself, and the add-ons stacked on top of it, extended warranties, gap insurance, paint protection. None of those are wrong to want, but each one financed into the loan raises the amount you're amortizing and therefore the interest you pay on it for the life of the loan. Ask for the out-the-door price and the rate separately from any add-on pitch, and price the add-ons on their own before deciding whether to finance them at all.

Related calculators

Car Lease Calculator, if you're weighing lease against buy
Loan Calculator, the general version without tax or trade-in fields
APR Calculator, to fold in a financed add-on's true cost
Refinance Calculator, for after you've had the loan a while

Good to know

FAQs

My state doesn't tax-credit the trade-in. Does that change how I should use this tool?

Yes. If your state taxes the full vehicle price regardless of trade-in, set the trade-in value field to 0 and instead add its value directly to your down payment field, so the tax calculation matches your state's rule instead of assuming a trade-in credit that doesn't apply to you.

Is a 72 or 84 month auto loan ever a good idea?

It can lower the monthly payment enough to fit a budget, but a car depreciates faster than a 72-84 month loan pays down, so for much of the term you owe more than the car is worth. If the loan is that long only because the payment otherwise doesn't fit, a less expensive vehicle is usually the safer fix.

Does a dealer's advertised rate include any conditions I should ask about?

Often, yes. The lowest advertised rate on a dealer lot is frequently reserved for a specific term length, a specific trim, or the strongest credit tier, and can exclude any incentive or rebate. Ask directly whether the rate quoted to you carries any of those conditions before you compare it to a pre-approval from your own bank or credit union.

Can I share this exact scenario with someone else?

Yes, use the "Copy link to this calculation" button under the results. It encodes your price, down payment, trade-in, tax rate, interest rate, and term into the URL, so opening that link reproduces the same numbers.