Build the amount financed from the negotiated vehicle price, trade-in, cash down, modeled tax, and entered charges. Then use the contract annual interest rate—not APR—to estimate payments, interest, payoff timing, and the changing loan balance.
Mortgage & Loans calculator Content updated 2026-08-16Calculations run privately in your browser
Cindy Zhang and Heather Kincaid co-authored the plain-language explanation of the purchase-price inputs, fixed-rate amortization model, schedule, worked example, output interpretation, limitations, and links to the cited Consumer Financial Protection Bureau resources. This is an editorial authorship scope, not a claim of lender, dealer, underwriting, legal, tax, financial-planning, or other professional review.
The byline does not claim professional credentials, trade, finance, insurance, actuarial, underwriting, or claims experience, licensed review, or independent professional review for either author.
Enter vehicle financing assumptions
Example values are prefilled
How to use this auto loan calculator
Estimate an auto-loan amount financed, fixed monthly payment, total interest, extra-payment payoff, term alternatives, and a monthly or annual amortization schedule.
Formula
Amount financed = vehicle price + modeled vehicle tax + entered financed charges − cash down − net trade-in credit. Monthly payment = P × r ÷ [1 − (1 + r)^−n], where r is the contract annual interest rate ÷ 12; optional extra principal is then applied in the payoff schedule.
Quick example
Example: A $35,000 vehicle with $5,000 cash down, a $3,000 net trade-in credit that reduces taxable price, 6% modeled tax, and $1,200 in financed charges produces a $30,120 amount financed. At a 7% contract interest rate for 60 months, the modeled required payment is about $596.41 and total interest is about $5,664.73.
Accuracy and limitations
The model assumes a fixed contract interest rate, equal monthly periods, on-time payments, and extra payments applied immediately after scheduled interest. It does not calculate APR, daily simple interest, exact payment dates, late charges, prepayment penalties, rebates, depreciation, or lender-specific allocation rules. Taxable bases, trade-in credits, government charges, documentation fees, optional products, and negative equity vary; reconcile the result with the retail installment contract and Truth-in-Lending disclosure.
Sources and formula references
CFPB: Auto-loan key terms — Official definitions of amortization, APR, interest rate, down payment, term, principal, and total cost
CFPB: Interest rate versus APR — Official explanation that interest rate and APR are different measures and should not be interchanged
CFPB: How to compare auto-loan offers — Official guidance to compare amount financed, APR and interest rate, term, monthly payment, and total interest
Use the agreed vehicle price before tax, government charges, optional products, cash down, and trade-in. Ask for an itemized out-the-door quote so the number is not reconstructed from a promoted monthly payment or from a price that depends on financing add-ons.
Separate cash down from net trade credit
Cash down and trade-in credit both reduce the amount financed, but they are different parts of the transaction. Enter the trade allowance only after subtracting the payoff owed on the traded vehicle; if that difference is negative, obtain a written itemization instead of hiding negative equity in another field.
Verify tax and financed charges
Confirm the sales or use tax rate, taxable base, trade-in credit rule, government charges, documentation fees, and optional products for the transaction's jurisdiction. This simplified calculator taxes the modeled vehicle base, then adds the entered combined charges, so any tax attributable to fees must be included in that entered dollar amount.
Use the contract interest rate
Copy the fixed annual interest rate used to accrue interest on the contract balance. Do not substitute APR: CFPB explains that APR is a broader comparison measure that also reflects certain fees and therefore can differ from the interest rate used in this payment equation.
Match term and extra-payment assumptions
Enter the exact scheduled payment count from the offer. Add recurring extra principal only if it fits the budget and the lender confirms how it will be credited; the schedule assumes the same extra amount arrives with every payment and does not model a prepayment charge.
How the calculation works
Determine the modeled taxable base
Start with the negotiated vehicle price. Subtract the net trade-in credit from that base only when the trade-in tax-credit control is selected, then multiply the nonnegative base by the entered sales-tax rate.
Build the amount financed
Add modeled vehicle tax and the entered financed charges to the vehicle price, then subtract cash down and net trade-in credit. The amount financed cannot fall below zero in this model.
Calculate the required payment
Convert the contract annual interest rate to a monthly rate and apply the standard level-payment amortization formula over the entered number of months. At a zero rate, divide the amount financed evenly across the term.
Simulate interest, principal, and payoff
For each modeled month, calculate interest on the opening balance, apply the required payment plus any entered extra amount, and reduce the balance by the principal portion. The final payment is limited to the remaining balance plus that month's interest.
Present the schedule and comparisons
Display each payment in the monthly view or group the same underlying rows into annual totals. Separately calculate common 36-, 48-, 60-, and 72-month cases plus the entered term at the contract rate without extra payments so term tradeoffs remain visible.
Worked calculation: Consider a $35,000 negotiated vehicle price, $5,000 cash down, a $3,000 net trade-in credit that reduces taxable price, a 6% sales-tax rate, $1,200 in charges added after modeled tax, a 7% fixed contract interest rate, a 60-month term, and no extra principal.
Subtract the $3,000 net trade-in credit from $35,000 to obtain a $32,000 modeled taxable vehicle price; 6% tax is $1,920.
Add $35,000, $1,920 of modeled tax, and $1,200 of entered charges, then subtract $5,000 cash down and the $3,000 trade-in credit. The amount financed is $30,120.
Convert the 7% contract annual interest rate to 0.07 ÷ 12 per month and amortize $30,120 across 60 payments. The modeled required payment is about $596.41.
In the first modeled month, interest is $30,120 × 0.07 ÷ 12 = $175.70; about $420.71 of the payment reduces principal, leaving approximately $29,699.29.
Across all 60 modeled payments, principal and interest total approximately $35,784.73, including about $5,664.73 of interest. Adding the $5,000 cash down produces about $40,784.73 of modeled cash outlay, excluding the trade-in's economic value and other ownership costs.
Result: The worked calculation connects the purchase worksheet to the payment formula and the first schedule row. It shows why the $596.41 payment cannot be evaluated alone: the user must also reconcile the $30,120 amount financed, $5,664.73 modeled interest, trade-in value, disclosures, and excluded ownership costs.
Next step: Replace the example with each written offer, compare contract interest rate and APR as separate fields, reconcile the amount financed and finance charge with the Truth-in-Lending disclosure, and ask the lender or dealer to explain any difference in writing before signing.
Interpret the result
Amount financed
This is the calculator's reconstructed principal after its modeled tax, entered charges, cash down, and trade-in credit. Compare it directly with the amount-financed disclosure and investigate every difference before signing.
Required monthly payment
This is the fixed principal-and-interest payment produced by the entered amount, contract interest rate, and term. It does not include a voluntary extra payment or later charges, and it may differ from a contract that uses daily interest or different payment dates.
Payoff and interest
The modeled payoff and total interest assume every payment arrives on schedule and every extra amount is applied as modeled. Compare the no-extra term rows with the entered extra-payment result to understand the tradeoff, then confirm the lender's allocation and prepayment rules.
Monthly or annual schedule
Each row separates interest from principal and carries the remaining balance forward. The schedule is an arithmetic model, not a payoff quote; a servicer's dated payoff can include daily accrued interest, fees, or other contract amounts.
APR and total transaction cost
The calculator intentionally does not derive APR. Use the lender's Truth-in-Lending disclosure to compare APR, finance charge, total of payments, and amount financed, and budget separately for insurance, registration, maintenance, energy or fuel, repairs, parking, and depreciation.
Common mistakes to avoid
Entering APR as though it were the fixed contract interest rate used in the monthly payment formula.
Negotiating only from a target monthly payment while overlooking the vehicle price, amount financed, term, finance charge, and total of payments.
Entering the gross trade allowance without subtracting the payoff still owed on the traded vehicle.
Assuming every jurisdiction taxes the same items or gives the same trade-in credit without checking an itemized quote.
Combining optional add-ons with required government or lender charges and losing sight of what was voluntarily financed.
Treating the modeled remaining balance as a lender payoff quote or assuming extra money will automatically be applied to principal.
Decision checklist
Request itemized out-the-door prices before comparing financing and keep optional products separate.
Compare written offers using amount financed, contract interest rate, APR, term, payment, finance charge, and total of payments.
Verify trade allowance, trade payoff, tax treatment, rebates, fees, and every add-on against the transaction documents.
Check the payment schedule, first-payment date, late-payment terms, prepayment provisions, and how extra amounts are allocated.
Run a shorter-term case and a higher-rate case, then add insurance, registration, maintenance, repairs, energy or fuel, parking, and depreciation to the ownership budget.
Retain the dated inputs and result as an arithmetic cross-check, and rely on the completed contract and required disclosures for final terms.
Frequently asked questions
Should I enter APR or the contract interest rate?
Enter the fixed contract annual interest rate used to accrue interest on the balance. CFPB explains that APR also includes certain fees and is a broader offer-comparison measure; this calculator does not derive or substitute for the disclosed APR.
Does the calculator include negative equity?
Not as a separate input. Enter trade-in as the allowance minus the existing payoff only when that result is nonnegative. If the payoff is larger, obtain an itemized quote showing how the negative equity is paid or financed rather than concealing it in another field.
Is the lowest monthly payment the cheapest loan?
No. A longer term can reduce the required payment while increasing total interest and the period during which the balance may exceed the vehicle's value. Compare amount financed, interest rate, APR, term, finance charge, and total of payments.
Why can the dealer's tax and amount financed differ?
Trade-in tax credits, rebates, taxable fees, rate caps, registration rules, and optional products vary by jurisdiction and transaction. The calculator uses a simplified vehicle taxable base and adds the entered charges afterward; reconcile it with an itemized out-the-door quote.
Does an extra payment always reduce principal immediately?
Not necessarily. Application order, payment dates, accrued interest, fees, and prepayment terms depend on the contract and servicer. Confirm instructions before relying on the modeled payoff savings.
Is the schedule a payoff quote?
No. It is a fixed monthly-period amortization model. A dated lender payoff may include daily accrued interest, fees, or other contract amounts and should be requested directly from the servicer.
What vehicle costs are outside this result?
Budget separately for insurance, registration renewals, maintenance, repairs, fuel or charging, parking, tolls, depreciation, and any cash-paid item not included in the entered purchase assumptions.
