Financing a car means borrowing the purchase price and repaying it with interest over a few years. This calculator turns the vehicle price, taxes, your down payment and trade-in into a clear monthly payment and total cost.
What you actually finance
The loan isn't the sticker price. It's the price plus sales tax, minus your down payment and trade-in. Reducing the financed amount — through a bigger down payment or trade-in — lowers both your monthly payment and the total interest you'll pay.
Depreciation and being 'underwater'
New cars lose value fast, often 20% in the first year. If your loan balance falls slower than the car's value, you owe more than it's worth — a problem if you need to sell or the car is totalled. Larger down payments and shorter terms protect you.
Getting the best deal
Secure pre-approval from a bank or credit union before visiting the dealer, negotiate the vehicle price separately from financing, and compare the APR across offers rather than fixating on the monthly payment.
Frequently asked questions
The amount financed (price + sales tax − down payment − trade-in) is amortized over the term using the monthly interest rate. This calculator does the full computation for you.
Around 20% is a good target. A larger down payment lowers your monthly payment, reduces total interest, and helps you avoid owing more than the car is worth as it depreciates.
Long terms (72–84 months) lower the monthly payment but significantly increase total interest and keep you 'underwater' longer. Shorter terms cost less overall.
In many places, yes — sales tax is charged on the price minus the trade-in value. This calculator assumes that, but rules vary by region, so verify locally.