Buying a new or used car is a significant financial commitment. This Auto Loan Calculator is designed to help you understand the true cost of financing a vehicle before you step onto the dealership lot. By inputting the vehicle price, your down payment, trade-in value, and financing terms, you can determine your estimated monthly payment and the total interest you will pay over the life of the loan.
Understanding the Inputs
Vehicle Price: The negotiated purchase price of the car, truck, or SUV. Do not include tax or title fees here; the calculator will handle tax separately.
Down Payment: Cash you are paying upfront. A larger down payment reduces the amount you need to finance, lowering your monthly payment and total interest.
Trade-in Value: The amount the dealer is offering for your current vehicle. This acts as a credit against the purchase price.
Sales Tax Rate: The percentage of sales tax charged by your state or county. This is calculated on the vehicle price (often adjusted for trade-in value depending on state laws).
Interest Rate (APR): The annual percentage rate for your loan. Rates vary based on your credit score, the vehicle's age, and the lender.
Loan Term: How long you will take to repay the loan, expressed in months. Common terms are 36, 48, 60, 72, or 84 months.
How Monthly Car Payments are Calculated
Auto loans typically use an amortization formula to determine payments. This ensures that a portion of every payment goes toward interest, while the remainder reduces the principal balance. The formula used is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Where:
M = Total monthly payment
P = The principal loan amount (Vehicle Price + Tax – Down Payment – Trade-in)
i = Monthly interest rate (Annual Rate / 12)
n = Number of months required to repay the loan
Tips for Lowering Your Auto Loan Costs
To save money on your next vehicle purchase, consider the following strategies:
Shorten the Term: While a 72 or 84-month loan lowers your monthly payment, it significantly increases the total interest paid. Aim for a 48 or 60-month term if your budget allows.
Increase the Down Payment: Putting down at least 20% of the vehicle price prevents you from becoming "upside-down" on the loan (owing more than the car is worth).
Improve Your Credit Score: Borrowers with excellent credit scores often qualify for 0% or very low APR offers, which can save thousands of dollars over the life of the loan.
function calculateAutoLoan() {
// Get Inputs
var price = parseFloat(document.getElementById("vehiclePrice").value);
var down = parseFloat(document.getElementById("downPayment").value);
var trade = parseFloat(document.getElementById("tradeInValue").value);
var taxRate = parseFloat(document.getElementById("salesTax").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var months = parseFloat(document.getElementById("loanTerm").value);
// Validation: Check if required inputs are valid numbers
if (isNaN(price)) price = 0;
if (isNaN(down)) down = 0;
if (isNaN(trade)) trade = 0;
if (isNaN(taxRate)) taxRate = 0;
if (isNaN(interestRate)) interestRate = 0;
if (isNaN(months) || months Price, tax base is 0.
var taxableAmount = Math.max(0, price – trade);
var taxAmount = taxableAmount * (taxRate / 100);
// 2. Calculate Amount Financed (Loan Principal)
// Loan = (Price + Tax) – Down – Trade
// Note: Trade is already accounted for in tax calc, but we need to subtract the value from total cost here.
// Actually: Total Cost Initial = Price + Tax.
// Amount to Pay = Total Cost Initial – Down – Trade.
var totalInitialCost = price + taxAmount;
var loanPrincipal = totalInitialCost – down – trade;
if (loanPrincipal <= 0) {
// No loan needed
document.getElementById("displayMonthly").innerText = "$0.00";
document.getElementById("displayLoanAmount").innerText = "$0.00";
document.getElementById("displayTotalInterest").innerText = "$0.00";
document.getElementById("displaySalesTax").innerText = formatCurrency(taxAmount);
document.getElementById("displayTotalCost").innerText = formatCurrency(totalInitialCost);
document.getElementById("results").style.display = "block";
return;
}
// 3. Calculate Monthly Payment
var monthlyPayment = 0;
var totalInterest = 0;
if (interestRate === 0) {
monthlyPayment = loanPrincipal / months;
totalInterest = 0;
} else {
var monthlyRate = (interestRate / 100) / 12;
// Formula: P * (r * (1+r)^n) / ((1+r)^n – 1)
var x = Math.pow(1 + monthlyRate, months);
monthlyPayment = (loanPrincipal * x * monthlyRate) / (x – 1);
totalInterest = (monthlyPayment * months) – loanPrincipal;
}
var totalCostOfLoan = loanPrincipal + totalInterest;
// Total cost of vehicle includes down payment and trade in value theoretically,
// but user usually wants to know Total Paid via Loan + Down + Trade?
// Let's stick to "Total Cost" as (Monthly * Months) + Down + Trade (essentially what left the pocket + asset value)
// Or simpler: Total Paid back to bank + Down.
var totalPaidToBank = monthlyPayment * months;
var totalCostToBuyer = totalPaidToBank + down + trade;
// Although Trade isn't cash out of pocket, it's value consumed.
// Display Results
document.getElementById("displayMonthly").innerText = formatCurrency(monthlyPayment);
document.getElementById("displayLoanAmount").innerText = formatCurrency(loanPrincipal);
document.getElementById("displayTotalInterest").innerText = formatCurrency(totalInterest);
document.getElementById("displaySalesTax").innerText = formatCurrency(taxAmount);
document.getElementById("displayTotalCost").innerText = formatCurrency(totalPaidToBank + down); // Cash cost
document.getElementById("results").style.display = "block";
}
function formatCurrency(num) {
return "$" + num.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
}