Purchasing a vehicle is one of the most significant financial decisions most people make, second only to buying a home. Our Auto Loan Calculator is designed to help you navigate the complexities of car financing, ensuring you understand exactly how your down payment, trade-in value, and interest rate affect your monthly budget.
How Payment is Calculated
This calculator uses the standard amortization formula used by most dealerships and lenders. Here is a breakdown of the key factors:
Vehicle Price: The negotiated price of the car before taxes and fees.
Sales Tax: Often overlooked, sales tax adds a significant amount to your total loan. This is calculated based on the vehicle price (and sometimes adjusted for trade-ins depending on state laws).
APR (Annual Percentage Rate): This is the cost of borrowing money. A lower credit score generally results in a higher APR, which increases both your monthly payment and the total cost of the car.
Loan Term: While a longer term (like 72 or 84 months) lowers your monthly payment, it significantly increases the total interest you pay over the life of the loan.
Why Your Down Payment Matters
Putting money down upfront reduces the Principal Loan Amount. This has a two-fold benefit: it lowers your monthly obligation and reduces the amount of interest that accrues over time. A general rule of thumb is to aim for a down payment of at least 20% to avoid being "upside-down" on your loan (owing more than the car is worth).
Example Scenario
Imagine you are buying a car for $30,000 with a sales tax of 7%. The total cost becomes $32,100. If you have a trade-in worth $5,000 and put $2,000 cash down, you are financing $25,100.
At an interest rate of 6% over a 60-month term, your payment would be approximately $485 per month, and you would pay roughly $4,000 in interest over the five years.
function calculateAutoLoan() {
// 1. Get input values
var priceInput = document.getElementById("vehiclePrice").value;
var taxInput = document.getElementById("salesTax").value;
var downInput = document.getElementById("downPayment").value;
var tradeInput = document.getElementById("tradeIn").value;
var rateInput = document.getElementById("interestRate").value;
var termInput = document.getElementById("loanTerm").value;
// 2. Validate and Parse inputs to Floats
var price = priceInput === "" ? 0 : parseFloat(priceInput);
var taxRate = taxInput === "" ? 0 : parseFloat(taxInput);
var downPayment = downInput === "" ? 0 : parseFloat(downInput);
var tradeIn = tradeInput === "" ? 0 : parseFloat(tradeInput);
var annualRate = rateInput === "" ? 0 : parseFloat(rateInput);
var months = parseFloat(termInput);
// 3. Calculation Logic
// Calculate Sales Tax Amount
// Note: In some states tax is calculated on Price – TradeIn.
// For this general calculator, we calculate tax on the full Vehicle Price.
var taxAmount = price * (taxRate / 100);
// Calculate Total Cost of Vehicle (Price + Tax)
var totalVehicleCost = price + taxAmount;
// Calculate Total Deductions (Down + Trade)
var totalDown = downPayment + tradeIn;
// Calculate Amount to Finance
var loanAmount = totalVehicleCost – totalDown;
// Handle case where down payment > price
if (loanAmount 0) {
monthlyPayment = loanAmount / months;
}
totalInterest = 0;
totalLoanCost = loanAmount;
} else {
var monthlyRate = (annualRate / 100) / 12;
var mathPower = Math.pow(1 + monthlyRate, months);
monthlyPayment = loanAmount * ((monthlyRate * mathPower) / (mathPower – 1));
// Total cost over the life of the loan (payments * months)
totalLoanCost = monthlyPayment * months;
// Total Interest Paid
totalInterest = totalLoanCost – loanAmount;
}
// 4. Format Output (Currency)
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2
});
// 5. Display Results
document.getElementById("monthlyPaymentResult").innerHTML = formatter.format(monthlyPayment);
document.getElementById("priceResult").innerHTML = formatter.format(price);
document.getElementById("taxAmountResult").innerHTML = formatter.format(taxAmount);
document.getElementById("totalDownResult").innerHTML = formatter.format(totalDown);
document.getElementById("financedAmountResult").innerHTML = formatter.format(loanAmount);
document.getElementById("totalInterestResult").innerHTML = formatter.format(totalInterest);
document.getElementById("totalCostResult").innerHTML = formatter.format(totalLoanCost + totalDown); // Total cost includes down payment money spent
// Show the results section
document.getElementById("resultsSection").style.display = "block";
}