Please enter valid values for Vehicle Price and Interest Rate.
Estimated Monthly Payment
$0.00
Total Loan Amount
$0.00
Total Interest
$0.00
Total cost of car (Price + Tax + Interest): $0.00
Understanding Your Auto Loan Options
Purchasing a vehicle is a significant financial commitment. This Auto Loan Calculator is designed to help you understand exactly how much your car will cost you each month, factoring in sales tax, trade-ins, and financing charges. Unlike simple payment estimators, we account for the "Out the Door" price logic used by dealerships.
How the Calculation Works
Your monthly car payment is determined by three primary factors:
Principal Amount: This is the net amount you need to borrow. It is calculated by taking the vehicle price, adding sales tax (usually applied to the price minus trade-in value depending on state laws), and subtracting your down payment and trade-in allowance.
Interest Rate (APR): The Annual Percentage Rate determines the cost of borrowing money. A lower score typically secures a lower rate.
Loan Term: The length of time you have to repay the loan. Longer terms (like 72 or 84 months) lower your monthly payment but significantly increase the total interest paid over the life of the loan.
The Impact of Down Payments and Trade-Ins
Putting money down or trading in an old vehicle reduces the Loan-to-Value (LTV) ratio. This not only lowers your monthly payment but can also help you qualify for better interest rates. For example, on a $35,000 car, a $5,000 down payment can save you hundreds of dollars in interest compared to zero down.
Sales Tax Considerations
Many buyers forget to factor in sales tax, which can add thousands to the final price. In many states, you only pay sales tax on the difference between the new car price and your trade-in value. This calculator estimates tax based on that common tax credit structure, ensuring a more accurate monthly payment projection.
Optimizing Your Loan Term
While a 72-month or 84-month loan looks attractive due to the lower monthly payment, it puts you at risk of becoming "upside-down" on your loan (owing more than the car is worth) for a longer period. Financial experts often recommend a 60-month term or shorter to build equity faster and minimize interest costs.
function calculateCarLoan() {
// 1. Get Input Values
var priceInput = document.getElementById("vehiclePrice").value;
var taxInput = document.getElementById("salesTax").value;
var downPaymentInput = document.getElementById("downPayment").value;
var tradeInInput = document.getElementById("tradeInValue").value;
var interestInput = document.getElementById("interestRate").value;
var termInput = document.getElementById("loanTerm").value;
var resultsArea = document.getElementById("resultsArea");
var errorDisplay = document.getElementById("errorDisplay");
// 2. Validate Inputs
var price = parseFloat(priceInput);
var taxRate = parseFloat(taxInput) || 0;
var downPayment = parseFloat(downPaymentInput) || 0;
var tradeIn = parseFloat(tradeInInput) || 0;
var interestRate = parseFloat(interestInput);
var months = parseInt(termInput);
if (isNaN(price) || isNaN(interestRate) || price <= 0) {
errorDisplay.style.display = "block";
resultsArea.style.display = "none";
return;
}
errorDisplay.style.display = "none";
// 3. Logic Implementation
// Taxable amount: usually Price – TradeIn (varies by state, assuming standard trade-in tax credit here)
var taxableAmount = price – tradeIn;
if (taxableAmount < 0) taxableAmount = 0;
var taxAmount = taxableAmount * (taxRate / 100);
// Total Price "Out the Door" before financing adjustments
var totalPurchasePrice = price + taxAmount;
// Amount to Finance (Principal)
var loanPrincipal = totalPurchasePrice – downPayment – tradeIn;
if (loanPrincipal <= 0) {
// Edge case where trade/down payment covers the whole cost
document.getElementById("monthlyPaymentResult").innerHTML = "$0.00";
document.getElementById("totalLoanAmount").innerHTML = "$0.00";
document.getElementById("totalInterest").innerHTML = "$0.00";
document.getElementById("totalCost").innerHTML = "$" + totalPurchasePrice.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultsArea.style.display = "block";
return;
}
// Monthly Payment Calculation: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
// Convert annual rate to monthly and percentage to decimal
var monthlyRate = (interestRate / 100) / 12;
var monthlyPayment = 0;
var totalInterest = 0;
if (monthlyRate === 0) {
monthlyPayment = loanPrincipal / months;
} else {
var x = Math.pow(1 + monthlyRate, months);
monthlyPayment = (loanPrincipal * x * monthlyRate) / (x – 1);
}
var totalPaidToBank = monthlyPayment * months;
totalInterest = totalPaidToBank – loanPrincipal;
var totalCostOfCar = totalPurchasePrice + totalInterest;
// 4. Update UI
document.getElementById("monthlyPaymentResult").innerHTML = "$" + monthlyPayment.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("totalLoanAmount").innerHTML = "$" + loanPrincipal.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("totalInterest").innerHTML = "$" + totalInterest.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("totalCost").innerHTML = "$" + totalCostOfCar.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultsArea.style.display = "block";
}