Auto loan payments, in short
Your loan amount isn't the sticker price — it's the vehicle price minus your down payment and trade-in equity, plus sales tax and fees if you choose to roll them in rather than pay upfront. On a $35,000 car with $5,000 down, 6.5% APR, and a 60-month term, that works out to a $32,950 loan and a $644.70 monthly payment, with $5,732 in interest paid over the life of the loan.
Key takeaways
- On the calculator's default $35,000 car with $5,000 down, 6.5% APR, 60 months, 7% sales tax, and $500 in fees: loan amount $32,950, payment $644.70/month, total interest $5,732.28.
- Rolling the $2,450 sales tax and $500 in fees into the loan instead of paying them upfront raises the monthly payment by about $48 and adds roughly $426 in extra interest over the loan term.
- Stretching the same $35,000 loan from 36 months to 84 months cuts the payment from about $1,010 to $489 a month, but total interest more than doubles, from about $3,406 to $8,150.
- Trading in a car worth $8,000 while still owing $10,000 doesn't add the full $2,000 shortfall to the new loan — after the trade-in also lowers the taxable amount, the loan only grows by about $1,440.
What actually goes into your loan amount
Start with the vehicle price, subtract your down payment and any trade-in equity (trade-in value minus what you still owe on it), and you have the base amount to finance. Sales tax and fees can either be paid out of pocket at signing or added to that base and financed along with the car — a choice this calculator lets you toggle so you can see both outcomes side by side.
How this calculator builds your payment
Using the defaults — $35,000 vehicle, $5,000 down, no trade-in, 6.5% APR, 60-month term, 7% sales tax, $500 in fees, taxes and fees financed:
Sales tax = $35,000 × 7% = $2,450
Total price = $35,000 + $2,450 + $500 = $37,950
Loan amount = $37,950 − $5,000 down = $32,950
Monthly payment (6.5% APR, 60 months) ≈ $644.70
Over the full 60 months, that adds up to about $38,682 paid in total — $32,950 in principal and $5,732 in interest.
Financing your tax and fees vs. paying upfront
Rolling the $2,450 in tax and $500 in fees into the loan raises the loan amount by that same $2,950, which bumps the payment from about $596.77 to $644.70 a month — roughly $48 more. It also means paying interest on that $2,950 for the life of the loan, adding about $426 to total interest compared with paying tax and fees in cash at signing. Financing them is often the only realistic option if cash is tight, but it's not free — you're borrowing against a cost that doesn't add any value to the car itself.
Loan term trade-off: shorter vs. longer
On the same $35,000 car at 6.5%, stretching the term lowers the payment but raises total interest substantially:
36 months: $1,009.88/mo → $3,405.85 total interest
60 months: $644.70/mo → $5,732.28 total interest
84 months: $489.29/mo → $8,150.27 total interest
Going from 36 to 84 months cuts the payment by roughly half but more than doubles total interest — and a car depreciates the whole time, so longer terms also raise the odds of owing more than the car is worth for a stretch of the loan.
Trading in a car you still owe money on
If your trade-in is worth less than the payoff on its loan, that gap — negative equity — typically gets folded into the new loan. It's tempting to assume the loan simply grows by the full shortfall, but trading in a vehicle also reduces the taxable amount on the new purchase in most states, partially offsetting the increase. Trade in a car worth $8,000 while owing $10,000 on it, for example, and the new loan grows by about $1,440 rather than the full $2,000 gap, once the smaller tax bill is factored in.
Related calculators
If you're weighing a lease instead of a purchase, see the auto lease calculator for the same kind of monthly-payment breakdown. To see how fees alone affect your true borrowing cost, the APR calculator isolates that effect, and the general-purpose loan calculator works for any fixed-rate installment loan beyond vehicles.