Last revised: November 6, 2026 · By the FintechZoom Markets Desk, reviewed under our editorial policy
Auto loan calculator
This auto loan calculator works out the monthly payment, amount financed, sales tax, total interest and total cost of a car loan, and builds the full amortization schedule. It applies the trade-in and rebate tax rules for eight jurisdictions checked against their revenue or motor vehicle departments on November 6, 2026, adds negative equity to the loan, and can work backwards from a target payment to a vehicle price.
Amortization schedule
Each payment split into interest and principal, with the balance left after it.
Remaining loan balance
| Month | Payment | Principal | Interest | Ending balance |
|---|
How this calculator works
The calculator covers a fixed-rate, simple-interest US car loan with equal monthly payments. Interest is charged each month on the remaining balance at the APR divided by 12. Sales tax rules are those in force on November 6, 2026.
Taxable price = vehicle price − trade-in credit − rebate (only where the state lets it reduce the base)
Sales tax = taxable price × tax rate
Amount financed (P) = vehicle price − cash incentives − down payment − trade-in value + amount owed on trade-in + (sales tax + fees, if financed)
Monthly payment (M) = P × r ÷ (1 − (1 + r)−n), where r = APR ÷ 12 and n = number of months; if the APR is 0, M = P ÷ n
Total interest = M × n − P
Cash due at signing = down payment + (sales tax + fees, if not financed)
Total cost = vehicle price − cash incentives + sales tax + fees + total interest
The payment formula and the zero-rate rule are the standard amortized loan formulas (amortization calculator reference). The schedule is computed without rounding and shown to the cent; the last payment clears the remaining balance so the schedule ends at $0.00. In "price from payment" mode the calculator turns the target payment into a loan amount with the same formula, then searches for the vehicle price whose amount financed, including tax, fees and trade-in, matches it.
Trade-in equity is the trade-in value minus the amount still owed. Positive equity lowers the amount financed. Negative equity is added to it, and you pay interest on it for the whole term. The tax credit, where a state gives one, is applied to the trade-in allowance itself, which is how the Texas, Maryland, Michigan and Nevada sources describe it.
Sales tax on a car: trade-in and rebate rules by state
States differ on two questions: whether the trade-in lowers the price that is taxed, and whether a cash rebate does. The calculator loads the answer for the eight jurisdictions below, read from official state sources on November 6, 2026. For any other state the dropdown says "check with your state", and the calculator taxes the full price until you change the two settings, so it may overstate the tax. The tax rate itself is always the one you enter, because local rates vary.
| State | Trade-in reduces the taxable price | Cash rebate reduces the taxable price | Official source |
|---|---|---|---|
| California | No. Tax applies to the full price including the trade-in allowance | No. Consumer rebates are fully taxable | CDTFA 235.0180, CDTFA 295.0948 |
| District of Columbia | No. Excise tax is on fair market value (NADA guide), 1 to 11 percent by weight and fuel economy | No, for the same reason | DC DMV |
| Kentucky | Yes (6 percent usage tax; DOR worked example deducts the trade-in). New vehicles without a notarized affidavit are taxed on 90 percent of MSRP | Check with your county clerk (rebates cannot be deducted from MSRP) | Kentucky DOR, 2025 |
| Maryland | Yes, 6.5 percent excise on price less the trade-in allowance | No. Manufacturer rebates stay in the taxable price | MVA bulletin, April 23, 2026 |
| Michigan | Yes, up to $12,000 in 2026 (the cap rose from $5,000 by $1,000 a year and has no limit from 2029) | Check with Michigan Treasury | Michigan SOS trade-in FAQ |
| Nevada | Yes. Tax is paid on the net selling price | No. Manufacturer rebates do not affect the tax | Nevada Department of Taxation |
| Texas | Yes, 6.25 percent of sales price minus any trade-in allowance | Check with the Comptroller | Texas Comptroller |
| Virginia | No. Trade-in credit is not deducted | Yes. 4.15 percent of the price after rebates, minimum $75 | Virginia DMV |
| Hawaii, Montana, Oklahoma and all other states | Not verified: check with your state | Not verified: check with your state | Your state revenue or motor vehicle department |
Worked example
The calculator opens with this loan. A buyer in Texas pays $35,000 for a car, puts $4,000 down and trades in a car worth $8,000 that still has $10,000 owed on it. The loan is 60 months at 7 percent APR, and the $500 of fees and the sales tax are financed.
- Taxable price: $35,000 − $8,000 trade-in = $27,000. Sales tax at 6.25 percent: $1,687.50.
- Negative equity: $10,000 owed − $8,000 value = $2,000, added to the loan.
- Amount financed: $35,000 − $4,000 − $8,000 + $10,000 + $1,687.50 + $500 = $35,187.50.
- Monthly payment: r = 0.07 ÷ 12 = 0.0058333, so $35,187.50 × 0.0058333 ÷ (1 − 1.0058333−60) = $696.75.
- Total of 60 payments: $41,805.28. Total interest: $6,617.78.
- Total cost: $35,000 + $1,687.50 tax + $500 fees + $6,617.78 interest = $43,805.28.
The same deal in California at a 7.25 percent tax rate gets no trade-in credit, so tax is charged on the full $35,000: $2,537.50. The payment rises to $713.59 and the total cost to $44,815.14. Term length matters as well:
| Term | Monthly payment | Total interest |
|---|---|---|
| 48 months | $842.61 | $5,257.71 |
| 60 months | $696.75 | $6,617.78 |
| 72 months | $599.91 | $8,006.16 |
What each input means
- Vehicle price: the agreed selling price before tax, fees, trade-in and rebates.
- Loan term: number of monthly payments, 1 to 120.
- APR: the annual percentage rate from the lender. The CFPB says the interest rate is the cost of borrowing, while the APR is the interest rate plus other fees charged with the loan, and all lenders must disclose it (CFPB, reviewed August 28, 2026). Compare APRs with APRs.
- Down payment: cash you pay toward the car.
- Cash incentives or rebates: manufacturer or dealer cash that lowers the price you finance. Whether it lowers the tax depends on the state.
- Trade-in value and amount owed: the dealer's allowance for your old car and the payoff on its loan.
- State and sales tax rate: the state sets which tax rule applies; the rate is the combined state and local rate you enter.
- Fees: title, registration, documentation and other charges. They are not taxed in this calculator.
Limitations
- Trade-in and rebate rules are loaded for California, the District of Columbia, Kentucky, Maryland, Michigan, Nevada, Texas and Virginia only. Hawaii, Montana, Oklahoma and other states need a check with the state.
- Taxes charged on a value other than the price, such as Kentucky's 90 percent of MSRP without an affidavit or the District's fair market value, are approximated by taxing the price.
- Minimum taxes (Virginia's $75), taxes on fees, service contracts, GAP coverage and add-ons are not modeled.
- Payments are monthly and on time. Precomputed-interest loans, late fees, extra payments and refinancing are outside its scope.
- The payoff month assumes the first payment falls one month after the day you run the calculator.
Auto loan calculator FAQs
How is an auto loan payment calculated?
The calculator uses the standard amortized loan formula: payment = P times r divided by (1 minus (1 + r) to the power of minus n), where P is the amount financed, r is the APR divided by 12 and n is the number of monthly payments. At a 0 percent APR the payment is P divided by n. A $35,187.50 loan at 7 percent for 60 months comes to $696.75 a month.
What is the difference between APR and interest rate on a car loan?
The Consumer Financial Protection Bureau says the interest rate is the cost of borrowing the money, while the APR measures the interest rate plus other fees charged with the loan, and every lender must disclose it. The CFPB advises comparing APRs with APRs, not with interest rates. If the loan has no lender fees the two are the same. If it has fees, entering the APR here slightly overstates the interest, and entering the bare rate understates the cost.
Does a trade-in lower the sales tax on a car?
It depends on the state. Of the states checked for this page, Texas, Maryland and Nevada tax the price after the trade-in allowance, Kentucky deducts it in the Department of Revenue example, and Michigan allows a credit capped at $12,000 for 2026. California and Virginia tax the price before the trade-in. The District of Columbia taxes fair market value instead of the price. For every other state, check with your state revenue or motor vehicle department.
What happens if I owe more on my trade-in than it is worth?
That difference is negative equity. If the dealer pays off the old loan, the unpaid amount is added to the new loan, so you borrow more and pay interest on it. In the example on this page, an $8,000 trade-in with $10,000 still owed adds $2,000 to the amount financed. The states checked here give the tax credit on the trade-in allowance itself, not on the allowance minus the payoff.
Do manufacturer rebates reduce the sales tax?
Not in every state. Virginia DMV taxes the price after rebates and incentives. California treats consumer rebates as fully taxable, the Maryland MVA keeps manufacturer rebates in the taxable price, and the Nevada Department of Taxation says rebates do not affect the tax. In every case the rebate still lowers the amount you finance. Use the incentive setting in the calculator to match your state.
Should taxes and fees be rolled into the loan?
Financing them lowers the cash due at signing but adds them to the balance that accrues interest. In the example on this page, $2,187.50 of tax and fees financed at 7 percent for 60 months adds about $411 of interest. Uncheck the box in the calculator to see the payment with tax and fees paid up front.
What does total cost mean in this calculator?
Total cost is the vehicle price minus cash incentives, plus sales tax, plus fees, plus all interest paid on the loan. It is the same as the loan payments plus the cash paid up front plus the trade-in value, minus the payoff of the old loan. It leaves out insurance, fuel, maintenance and registration renewals.
How does the loan term change the total interest?
A longer term lowers the payment and raises the interest. For the $35,187.50 example at 7 percent APR, 48 months costs $842.61 a month and $5,257.71 of interest, 60 months costs $696.75 and $6,617.78, and 72 months costs $599.91 and $8,006.16.
Is the result a loan offer?
No. It is an estimate built from the numbers you enter. A lender sets the APR after checking credit, and the final amount financed, tax and fees appear on the retail installment contract, which you should read before you sign.
How we check this calculator
On November 6, 2026 we read the calculator code, ran the audit test loans (two Bankrate examples, a Texas trade-in loan, the same loan in California, a 0 percent loan with tax paid up front and a reverse payment case) against an independent Python model, and every result matched to the cent. We then checked the state table in the code. The old version used an undated third-party list that gave no trade-in credit in Kentucky, Maryland, Michigan and Montana and a full credit in Nevada and Oklahoma without checking their state sources. Against the official sources read on November 6, 2026, Kentucky and Maryland do give the credit, Michigan gives a capped credit of $12,000, and Nevada is confirmed. Kentucky would have been overtaxed by $500 on an $8,000 trade-in at 6.25 percent. States we could not confirm are now labeled "check with your state". The old "total economic cost" figure is now total cost, defined above, and the payment is labeled APR.
Revision history: November 6, 2026, state tax rules verified and rewritten, negative equity shown, formulas, worked example, state table and FAQ added; previous edition September 21, 2026.
Related: amortization calculator, interest rate calculator, credit card payoff calculator, take-home paycheck calculator, home equity loan calculator, inflation calculator, all calculators.
Sources: CFPB, interest rate vs APR; CDTFA annotation 235.0180; CDTFA annotation 295.0948; Virginia DMV sales and use tax; Kentucky DOR motor vehicle usage tax; Michigan SOS trade-in credit FAQ; Maryland MVA taxable price bulletin; Nevada Department of Taxation automotive guide; Texas Comptroller motor vehicle sales tax; DC DMV excise tax; Amortization calculator formula.
This auto loan calculator gives estimates for education and comparison, based on the figures you enter and the state rules cited above as of November 6, 2026. It is not a loan offer, a credit decision, or legal, tax or financial advice. Your APR, amount financed, taxes and fees are set by your lender, dealer and state, and appear on your retail installment contract. See our disclaimer.
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