Free car loan calculator with sales tax, doc fees, trade-in equity, the 20/4/10 affordability check, and a New Car vs Used Car comparison. See your real monthly car payment and whether the car is genuinely within reach.
Educational tool, not financial advice. SavingsClub is not a licensed financial advisor.
U.S. average sales tax is around 7%. Doc fees vary by state, commonly $200 to $800 but can exceed $1,000.
If you owe more on your trade-in than it is worth, that difference gets rolled into the new loan. See warning below if applicable.
This auto loan calculator uses the standard amortizing loan formula to compute your monthly car payment. The four inputs that drive the result are the amount you finance, the annual percentage rate (APR), the loan term in months, and any extra costs rolled into the loan. The math itself is simple, but most basic car loan calculators leave out the costs that actually drive your true monthly payment: sales tax, documentation fees, and negative trade-in equity. This calculator includes all three.
If you are searching for an auto loan payment calculator, a car finance calculator, or a way to calculate car payment with taxes included, this tool answers all three questions in one pass. Enter your numbers and click Calculate to see the real out-the-door price, the financed amount, your monthly payment, total interest paid over the life of the loan, and the total amount you will hand to the lender.
Every car loan calculator will tell you the monthly payment. Very few will tell you whether that payment is a good idea for your specific income. The 20/4/10 rule is a widely-used personal-finance guideline that gives you a real answer.
20 percent down: Put at least 20% of the vehicle's price down at signing. This protects you against depreciation (most new cars lose 20% of their value in the first year) and keeps you from being upside-down on the loan.
4-year term maximum: Finance for no longer than 48 months. Longer terms mean lower payments but dramatically more interest, and a much higher chance of owing more than the car is worth at any given time. The average U.S. auto loan is now 68 months, meaningfully outside the recommended range.
10 percent of gross income for total transportation: Total monthly transportation costs (loan, insurance, fuel, maintenance, registration) should stay under 10% of your gross monthly income. The loan payment alone is typically 60% to 70% of total transport costs. Insurance and fuel often add another 30% to 50% on top of the payment.
This calculator checks all three rules and tells you which ones your loan passes. It is not the only way to evaluate a car purchase, but it filters out the loans that have caused the most regret over the years.
The biggest financial advantage of buying used is avoiding the steep early depreciation curve. A new car loses about 20% of its value in the first year and roughly 50% by year 5. A 2 to 3 year old used car has already absorbed that hit, which means the seller (not you) ate the depreciation. You buy in at a lower price, finance less, pay less interest, and the dollar amount of future depreciation is smaller.
The trade-offs are real. Used cars typically carry a 1 percentage point higher APR than equivalent new car loans. Maintenance and repair costs rise as the vehicle ages. Warranty coverage is often expired or limited. Reliability statistics vary widely by make and model. For most budget-conscious buyers, the math still favors used. For buyers who plan to keep a car 10+ years, the difference shrinks because new car depreciation matters less over longer hold periods.
This calculator runs the New vs Used comparison above using your specific numbers. The assumptions are conservative: used car priced at 75% of new (typical 2 to 3 year old equivalent), used APR is 1% higher than new, same down payment, same loan term, plus estimated insurance and end-of-term resale value for each.
The biggest mistake in basic car loan calculators is treating the vehicle's sticker price as the loan amount. It isn't. The amount you actually borrow includes sales tax (typically 5% to 10% of the price, varying by state and county) and documentation fees ($200 to $1,000+ depending on the dealership and state).
On a $35,000 vehicle with a 7% sales tax and a typical $800 doc fee, you are actually financing closer to $38,250 before any down payment, not $35,000. Most calculators ignore this gap. This one builds it in.
States vary widely on auto sales tax. Oregon, Montana, New Hampshire, Delaware, and Alaska have no state sales tax. California, Tennessee, and Indiana are at 7%+. Some states tax only the net price after trade-in, which makes a meaningful difference if you have a valuable trade.
If your current car is worth more than what you owe on it, you have positive equity, and that equity reduces your new loan. Good. If it is worth less than what you owe, you have negative equity, also called being "upside-down" or "underwater."
Here is the trap: dealers will offer to roll your negative equity into the new car loan. This makes the new monthly payment look manageable but creates a much larger and longer loan than the new car alone warrants. Now you are financing the new car plus some of the old car's debt, often at a higher rate than the original loan.
The math gets ugly fast. A buyer with $4,000 negative equity who rolls it into a new 72-month loan can easily end up upside-down on the new car within months, guaranteeing the same problem will repeat at the next trade. The cleaner solution is usually to keep the old car longer, pay off the negative equity in cash before trading, or hold off on the upgrade entirely.
Dealers receive a commission on the financing they arrange. That commission comes from marking up the actual lender's rate. Even when a dealer offers you a "great" rate, it is often 1 to 3 percentage points above what you could have qualified for at a credit union or online lender.
The fix is simple but underused: get pre-approved at a credit union before you visit any dealer. Bring the pre-approval letter with you. The dealer either has to beat it (sometimes they can, they want the sale), or you use the pre-approval. Either way, you are not stuck taking whatever rate the finance manager hands you in the back office.
Refinancing 3 to 12 months after the original loan is also common practice. Once you have made on-time payments and the loan is established, lenders will often offer better terms than what the dealer marked up.
Negotiating the monthly payment instead of the total price. A salesperson who keeps asking "what payment can you afford" is shifting the conversation away from the actual price. Always negotiate total out-the-door price first.
Saying yes to the extras in the finance office. Extended warranties, GAP insurance, paint protection, fabric protection, VIN etching, tire and wheel protection. Most of these have huge markups in the finance office. If you want them, you can almost always get them later for less.
Taking a longer loan term to "afford" a more expensive car. A 72 or 84-month loan turns a car you cannot afford into a payment you can technically make. The total cost balloons and you spend years upside-down. If the 48-month payment does not work, the car is too expensive.
Ignoring insurance before you buy. Insurance varies wildly by vehicle. A sports car or luxury SUV can cost double or triple the insurance of a mid-range sedan. Get a real insurance quote before you commit, not after.
Skipping the pre-purchase inspection on a used car. A $100 to $200 independent inspection can save you from a $3,000 repair surprise. Sellers who refuse one are telling you something.
As of 2026, good rates for new car loans range from about 6% to 8% for borrowers with credit scores above 720, and 8% to 11% for scores in the 660 to 720 range. Used car rates are typically 1 to 2 percentage points higher. Credit unions often offer the lowest rates, sometimes 1 to 2 points below banks and noticeably below dealership financing.
The 20/4/10 rule is a personal-finance guideline: put at least 20% down, finance for no longer than 4 years (48 months), and keep total monthly transportation costs (loan, insurance, fuel, maintenance) under 10% of your gross monthly income. Cars that fit this rule are usually genuinely affordable.
For most buyers on a budget, a 2 to 3 year old used car saves the most money. New cars lose about 20% of their value in the first year and roughly 50% by year 5. Buying used skips that steep early depreciation. The trade-offs are higher maintenance risk, no full warranty, and a slightly higher interest rate, typically 1 percentage point above new car loans. Run the New vs Used comparison above with your specific numbers.
Selling privately usually gets you 10% to 20% more than a dealer trade-in. The trade-off is convenience and time. Trade-ins also reduce sales tax in many states because tax is only charged on the difference between new car price and trade-in value. Run the math both ways before deciding.
You are upside-down (or underwater) when you owe more on your car loan than the car is currently worth. This often happens with long-term loans, low down payments, and rapid depreciation. The difference between what you owe and what it is worth has to come out of your pocket, or get rolled into your next car loan, making the next loan even harder to escape.
Refinancing usually makes sense if you can drop your rate by at least 1 to 2 percentage points and you still have at least 2 to 3 years left on the loan. People who took dealer financing without shopping often qualify for noticeably better rates from credit unions or online lenders within a few months. Use the refinance scenario in this calculator to see the actual dollar savings before applying.
A rough rule of thumb: total vehicle price under 35% of your annual gross income for a more conservative approach, or under 50% as an upper bound. For a $75,000 income, that is roughly a $26,000 to $37,500 vehicle. The 20/4/10 rule is more precise because it tests three separate factors instead of one.