Car Loan Calculator

Auto Loan Calculator: Estimating an Interest and Payments

This calculator is presumably suitable for all major needs related to estimating car loans. It can be used for basic loan deal evaluation in every country but also has some USA-specific features. If you’re not in the USA, just keep using it, adjusting it accordingly.

To get started, input all necessary information into the calculator, and once it’s done, click the "Calculate" button to generate your results, or use "Reset" to start over again. The calculator will display your monthly payment, total interest, and some other details, helping you plan your loan deal effectively.

Types of Auto Financing: Buy or Lease?

• Auto loans. An option for purchasing a new or used vehicle. Here you borrow money and repay it over a set term. You can get a loan from a financial company or bank, or directly through a dealership, which may offer incentives. This is ideal if you want to own the car.
• Auto lease. It is a long-term car rental agreement without the right of buying it at the end of the contract, or with it. Payments are lower than loans since you’re only covering the car’s depreciation, not its full value. At the end, you can return the car, buy it, or lease again, but extra miles or wear can lead to fees.
• Auto Refinance. Replaces your existing car loan with a new one, like for lowering the interest rate or reducing monthly payments. Smart move if your credit score has improved or market rates have dropped. Then you're on the position to cut costs without changing the vehicle. However, fees or penalties may apply. Use this Auto Refinance Calculator for estimates. 

What to Know About Auto Loans?

These loans are a financing option that allows you to purchase a vehicle, spreading its cost over time, and repaying a combination of principal and interest each month. This type of loan is typically secured, and the vehicle itself serves as collateral. Usually the lender can repossess the car if the borrower fails to make payments.

The borrowers in the USA, having two primary options—direct lending or dealership financing—normally facing loan terms ranging from 36 to 84 months. But there could be room for flexibility around the world.

Direct lending involves securing a loan from a bank, credit union, or online lender. It is usually taking place before visiting a dealership, giving buyers pre-approval and greater negotiating power. Yes, direct lending makes it easier to shop around and walk away if a deal isn’t favorable.

Dealership financing is when a dealer arranges the loan. Often through captive lenders tied to specific car brands, dealership financing can be beneficial when manufacturers offer promotional rates—such as 0%, 1.9%, or 2.9%—boosting sales in this way, especially for new cars.

Rebates, Fees and Trade-ins with Auto Loans

Regardless the country, almost every auto loan contract has costs surrounding closing of the deal. Along with different types of costs themselves (tax, insurance, fee), important that they also can typically be rolled into loan, or paid upfront. 

For the USA as an example, the most curious fee regarding to car buying is the sales tax. In this country sales tax is taken from the cost of the car, but the tax amount, either tax base changes depend on the state, amount left on trade-in, and rebates and incentives. The breakdown of the common cost groups:

Sales tax. Most states impose a sales tax on car purchases, with rates varying widely (e.g., 4% to over 10%). In many cases, you can finance this tax along with the car’s price, though some states require upfront payment. Notably, five states—Alaska, Delaware, Montana, New Hampshire, and Oregon—do not charge sales tax on vehicles, which can save you thousands.

Purchase Fees. This group of fees named “purchase” in our calculator and typically include the costs your dealership would assign with the car purchase. The most common in the USA are: document fees, title and registration fees, advertising fees, destination fee.

Insurance. If you’re financing a car, lenders usually require fully comprehensive insurance, to be able to proceed with paperwork. Some dealers offer temporary insurance (1–2 months) to facilitate paperwork, giving you time to secure a policy.

In our calculator we combined sales tax and purchase fees together by the condition whether they are going to be rolled into loan, or paid upfront. This is because in the USA, some states require upfront payment of sales tax, and it depends on borrower’s credit situation. Bearing this in mind, please adjust your input to the calculator accordingly.

Taxation Nuances with Trade-In

A trade-in occurs when you sell your current vehicle to the dealership, receiving credit toward your new car purchase. While convenient, trade-ins often yield less than the car’s market value, as dealerships aim to resell at a profit. Selling privately might net you more money, but it requires extra effort. The real financial nuance in USA with trade-ins lies in how they affect taxation, which varies by state. Depending on where you live—trade-in can influence the amount you owe. Here’s how it works:

• Most States with Sales Tax. In the majority of states that collect sales tax, the tax is applied to the difference between the new car’s price and the trade-in value. For example, if you buy a $70,000 car and trade in a vehicle worth $10,000 in a state with an 6% tax rate, the taxable amount is $60,000. This results in a sales tax of:
  $60,000 × 6% = $3,600
  This tax reduction can make trading in appealing, as it lowers out-of-pocket cost.
• States Without Trade-In Tax Breaks. Some states, including California, Hawaii, Michigan, Kentucky, Maryland, Virginia, and the District of Columbia, do not reduce sales tax based on trade-in value. Using the same example ($70,000 car, $10,000 trade-in, 6% tax rate), you’d pay tax on the full purchase price:
  $70,000 × 6% = $4,200
  That’s a $600 difference compared to states with the trade-in reduction. In these states, selling your car privately could save you significant tax dollars, making it a more attractive option.
• No Sales Tax States. As mentioned, Alaska, Delaware, Montana, New Hampshire, and Oregon have no sales tax on car purchases. In these states, trade-ins don’t affect taxation because there’s no tax to reduce. Your decision to trade in or sell privately hinges solely on the value offered by the dealership versus the open market.

Taxation Nuances with Rebates

Primarily for the new car buyers, rebates may be offered by manufacturers. A rebate is essentially a cash incentive provided to entice buyers, often presented as a discount or cash-back offer. It can lower the purchase price, but how these rebates interact with sales tax in the USA depends on where you live. For used cars, rebates are far less common as there is the challenge with assessing a used vehicle’s true value.

Example. For instance, imagine a vehicle priced at $70,000 with a $2,500 rebate. Normally the taxable amount drops to $67,500, but that’s not always the case in the United States. Taxation rules vary by state affecting your final cost.

Luckily, many states take an approach by taxing only the price after the rebate is applied, so you’d pay sales tax on $67,500 instead of the full price of $70,000. States that don’t tax rebate provide a double benefit for the borrowers: lowers both the price you pay and the tax you owe.