The payment sheet at the dealership starts from the car's price and quietly adds everything else. This calculator works the same way a lender does: it collects the sales tax, fees, down payment, and trade-in first, then prices the loan on what you actually finance, and shows what the term and the rate do to the total.
Dealers quote a monthly payment because a payment is easier to say yes to than a total. But the number the interest accrues on is the amount financed, and it is almost never the window sticker price. On the default inputs, the car costs $38,000, the buyer puts $5,000 down, and the trade-in column is empty. A 6% sales tax adds $2,280, and title, registration, and documentation fees add another $500. The loan is written for $35,780. Interest will now accrue on your sales tax every month for five years, which is one of the quietest ways a car becomes more expensive than the negotiation suggested.
Trade-ins change the tax bill too, in most states. Suppose the same buyer had an $8,000 trade-in. The taxable base drops from $38,000 to $30,000, sales tax falls from $2,280 to $1,800, and the amount financed drops to $27,300. The payment falls from $697.57 to $532.24, and total interest drops by $1,439.55 over the life of the loan. The trade-in saved money three separate ways: less borrowed, less taxed, and less interest on both.
The default loan charges $6,073.94 of interest, 16.98% of the amount financed, and puts the all-in cost of the car at $46,853.94 once tax, fees, and interest are counted. The first payment splits into $189.34 of interest and $508.23 of principal, so unlike a 30-year mortgage, a five-year car loan starts working for you almost immediately.
The default rate comes from Experian's State of the Automotive Finance Market report for Q2 2026, which puts the average new-car loan at $43,610 financed at 6.35% APR over 69.5 months, with an average payment of $765. Eighty-three percent of new-car buyers financed their purchase that quarter. Note the term: nearly six years has become normal, and in Experian's Q1 2026 data more than a third of new-car loans ran past 72 months. Loan terms have stretched further than most buyers realize, and the interest columns below show what that stretch costs.
Variables in plain terms. T is the taxable base, which most states define as the price minus any trade-in credit. P is the amount financed, the number every later calculation runs on. i is the monthly interest rate, the APR divided by 12, so 6.35% becomes 0.5292% per month. n is the number of monthly payments, 60 on a five-year loan. The payment formula is the same one behind any fixed-rate installment loan; the car-specific work all happens in assembling P correctly.
Price $38,000, trade-in $0, so T is $38,000 and the 6% tax is $2,280. With $5,000 down and $500 of fees, P = 38,000 − 5,000 − 0 + 2,280 + 500 = $35,780. With i = 0.0635/12 and n = 60, the payment formula gives M = $697.57. Across 60 payments the buyer pays $41,853.94, of which $6,073.94 is interest. Add the down payment back and the vehicle's all-in cost is $46,853.94, about $8,850 more than the sticker price.
Holding the $35,780 amount financed and the 6.35% APR fixed, only the term changes in the table below. This is the exact decision the finance office will hand you on a screen.
| Term | Monthly payment | Total interest |
|---|---|---|
| 48 months | $846.05 | $4,830.30 |
| 60 months (default) | $697.57 | $6,073.94 |
| 72 months | $598.91 | $7,341.32 |
| 84 months | $528.72 | $8,632.34 |
Read the jump from 60 to 72 months carefully, because it is the most common upsell. The payment drops by $98.66 a month, which sounds like savings. It costs $1,267.38 in extra interest, and it keeps you underwater longer, since a car loses value fastest in exactly the years the 72-month loan is barely denting the balance. The 84-month column shows the pattern at full extension: a payment $168.85 lower than the default, purchased with $2,558.40 of extra interest. The shorter term you can actually afford is the cheaper car.
The rate you are offered matters as much as the term. Experian's Q1 2026 report breaks new-car APRs out by credit score band, and the differences are dramatic when run through the same $35,780 loan at 60 months.
| Credit tier (Experian Q1 2026) | APR | Monthly payment | Total interest |
|---|---|---|---|
| Super prime (781+) | 4.55% | $667.86 | $4,291.66 |
| Market average | 6.35% | $697.57 | $6,073.94 |
| Near prime (601-660) | 9.67% | $754.42 | $9,485.35 |
| Subprime (501-600) | 13.44% | $822.19 | $13,551.20 |
The gap between super-prime and subprime on the same car is $9,259.54 of interest, more than half again the average down payment buyers put on a new car. Nothing on the options list comes close to that kind of money, which is why pulling your credit score and shopping a credit union before you negotiate the car itself is worth more than any haggling over window price.
Once the payment and total are on the table, the rest of the picture lives on other pages here. The loan payment calculator prices any fixed-rate installment loan with fewer car-specific fields, useful for comparing a personal loan against dealer financing, and it works through why the APR on the contract reads higher than the rate you negotiated. The amortization calculator splits this loan payment by payment and shows the balance every month, which matters if you plan to sell the car or pay it off early. And before signing anything, the 50/30/20 budget calculator is the quickest way to check that the payment fits inside a wants-and-everything-else budget rather than crowding out savings.
One habit worth keeping: get the out-the-door number, the price plus tax and fees, in writing before financing talks begin. This calculator rebuilds that number from its parts, so you can check the dealer's arithmetic against yours. Any difference in the amount financed flows straight into the payment they quote you.
Because buyers rarely pay cash for the add-ons. Sales tax, title and registration fees, and dealer documentation fees are all due at signing, and when they are not paid out of pocket they are folded into the amount financed. On the default example, a $38,000 car with a $5,000 down payment carries $2,780 of tax and fees, so the loan is $35,780, not $33,000. Rolling those charges in also means paying interest on your sales tax for the life of the loan.
Almost never in total dollars. Stretching the default loan from 60 to 72 months cuts the payment by $98.66 a month but raises total interest by $1,267.38, and the gap widens further at 84 months. A longer term only makes sense when the smaller payment is the difference between approving the loan and walking away, or when you deliberately invest the monthly difference and the return reliably beats the loan rate. Otherwise the short term you can afford is the cheap one.
It depends mostly on your credit tier. Experian's State of the Automotive Finance Market report for Q1 2026 puts average new-car APRs at 4.55% for super-prime borrowers with scores of 781 or above, 6.23% for prime, 9.67% for near-prime, 13.44% for subprime, and 16.01% for deep subprime. On the same $35,780 loan over 60 months, that spread between super-prime and subprime is worth more than $9,000 of interest, which is why checking your credit before shopping matters.
Do both and compare. A pre-approval from a bank or credit union gives you a rate baseline before you set foot in the showroom, and credit unions in particular frequently beat dealer-arranged financing for the same credit profile. Dealer or captive-lender financing can still win when the manufacturer is running a promotional rate or rebate, but promotional rates usually require excellent credit and sometimes cannot be combined with cash rebates. Get both numbers on the same loan amount and term, then pick the cheaper one.
Negative equity means you owe more on your current car than it is worth, and it usually comes from a small down payment, a long term, and the fast depreciation of the first two or three years. When you trade that car in, the shortfall does not disappear; lenders roll it into the new loan. That raises the amount financed above the value of the new vehicle from day one. Paying down the old loan before trading, or pricing the trade separately with a cash sale, keeps that debt out of the next car's financing.
A common guideline is at least 10 to 20 percent of the purchase price for a new car, plus enough to cover the tax and fees you would otherwise finance. A larger down payment does three things at once: it cuts the monthly payment, reduces total interest, and builds equity faster than the car depreciates, which protects you if the car is totaled or sold early. The default example uses $5,000 down on a $38,000 vehicle, about 13 percent, which is a realistic middle ground rather than a best case.
All calculation logic on this page is implemented from the primary documents below. Each one is listed with the figure it supplies, so any rate or threshold in the result can be traced back to its published source.
Same published formulas, same sourcing standard, one page each.