Car Loan Calculator

Negative equity, sometimes called being upside down, means you still owe more on your current car loan than the vehicle is worth as a trade-in. For example, if your trade-in is valued at six thousand dollars but you owe seven thousand five hundred, you have fifteen hundred dollars of negative equity. That gap does not disappear; it is typically rolled into your new loan, increasing the amount financed and your payments. This calculator accounts for negative equity so your financed amount is realistic. Rolling debt into a new loan can start the next car underwater too, so it is worth avoiding when possible.

In many US states, yes. Those states charge sales tax only on the price after your trade-in value is subtracted, which can save you a meaningful amount. This calculator applies that common treatment by taxing the price net of the trade-in. However, the rules vary: some states tax the full purchase price regardless of any trade-in, so the savings do not apply everywhere. Because tax law differs by location and changes over time, confirm how your state handles trade-ins. If your state taxes the full price, treat the tax figure here as lower than what you would actually owe.

Longer terms lower your monthly payment, which can make a car feel more affordable, but they are more expensive overall. Stretching a loan to 72 or 84 months means paying interest for more years, so total interest rises even at the same rate, and longer loans often carry higher rates too. You also stay in negative equity longer, owing more than the car is worth for much of the term, which is risky if you need to sell or the car is totaled. This calculator shows total interest and cost, so you can weigh a lower payment against the larger long-run price.

A larger down payment reduces the amount you finance, which lowers your monthly payment and total interest and helps you avoid being underwater. A common guideline is around 20% down on a new car and 10% on a used one, though the right amount depends on your budget and the loan terms. A solid down payment can also improve the rate you qualify for. The trade-off is using cash you might need elsewhere, so keep an emergency fund intact. Adjust the down payment in this calculator to see how it changes your financed amount and payment.

Yes. It lets you enter the sales tax rate and registration and documentation fees, then folds them into the amount financed along with the vehicle price, minus your down payment and trade-in equity. This gives a more realistic payment than using the sticker price alone, since taxes and fees can add a significant sum. Keep in mind that dealer fees vary and some charges may be negotiable, and tax rules on trade-ins differ by state. Verify the exact figures on your purchase agreement, since actual dealer fees and local taxes may differ from your estimates.

It pays to compare both. Dealers arrange financing conveniently and sometimes offer promotional low rates from manufacturers, but their markups can also make dealer financing more expensive. Getting pre-approved by your own bank or a credit union first gives you a benchmark rate and negotiating leverage, and credit unions often have competitive rates. Focus on the total cost and the APR, not just the monthly payment, and be cautious about add-ons rolled into the loan. This calculator does not shop rates for you, but you can enter different interest rates to compare offers side by side.