function calculateAutoLoan() {
// 1. Get Input Values
var price = parseFloat(document.getElementById("vehiclePrice").value);
var taxRate = parseFloat(document.getElementById("salesTax").value);
var down = parseFloat(document.getElementById("downPayment").value);
var trade = parseFloat(document.getElementById("tradeIn").value);
var rate = parseFloat(document.getElementById("interestRate").value);
var months = parseInt(document.getElementById("loanTerm").value);
// 2. Validate Inputs (Handle NaNs)
if (isNaN(price)) price = 0;
if (isNaN(taxRate)) taxRate = 0;
if (isNaN(down)) down = 0;
if (isNaN(trade)) trade = 0;
if (isNaN(rate)) rate = 0;
if (isNaN(months)) months = 60; // Default fallback
// 3. Logic: Calculate Tax and Loan Amount
// Note: Sales tax is usually applied to the vehicle price before incentives/down payment
// Some states deduct trade-in from taxable amount, but for general safety we calculate on price.
var taxAmount = price * (taxRate / 100);
var totalCostInitial = price + taxAmount;
var loanPrincipal = totalCostInitial – down – trade;
if (loanPrincipal < 0) {
loanPrincipal = 0;
}
var monthlyPayment = 0;
var totalInterest = 0;
var totalCost = 0;
// 4. Amortization Formula
if (rate === 0) {
monthlyPayment = loanPrincipal / months;
totalInterest = 0;
} else {
var monthlyRate = (rate / 100) / 12;
// Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var x = Math.pow(1 + monthlyRate, months);
monthlyPayment = (loanPrincipal * x * monthlyRate) / (x – 1);
// Total cost over life of loan
var totalPayments = monthlyPayment * months;
totalInterest = totalPayments – loanPrincipal;
}
// Total cost includes the down payment and trade-in value (equity) + total payments made
var grandTotalCost = (monthlyPayment * months) + down + trade;
// 5. Update UI
document.getElementById("monthlyPaymentOut").innerText = formatCurrency(monthlyPayment);
document.getElementById("loanAmountOut").innerText = formatCurrency(loanPrincipal);
document.getElementById("totalInterestOut").innerText = formatCurrency(totalInterest);
document.getElementById("totalCostOut").innerText = formatCurrency(grandTotalCost);
// Show result div
document.getElementById("resultDisplay").style.display = "block";
}
function formatCurrency(num) {
return "$" + num.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
}
Understanding Your Auto Loan Payment
Buying a car is one of the largest financial commitments most people make, second only to purchasing a home. Using an Auto Loan Amortization Calculator is essential to ensure you stay within your budget. While a car salesperson may focus on the monthly payment, it is critical to understand the total cost of ownership, which includes interest, sales tax, and the impact of your trade-in value.
How the Calculation Works
This calculator determines your monthly obligation based on the amortized loan formula. Here are the key factors that influence your wallet:
Vehicle Price & Sales Tax: Taxes are often overlooked but can add thousands to your loan. This calculator adds the tax to your purchase price before subtracting your down payment.
Down Payment & Trade-In: The more you pay upfront (cash or vehicle equity), the lower your principal. A lower principal reduces the interest you pay over the life of the loan significantly.
APR (Annual Percentage Rate): This is the cost of borrowing money. Even a 1% difference in APR can save (or cost) you hundreds of dollars over a 60-month term.
Loan Term: While a 72 or 84-month loan lowers your monthly payment, it drastically increases the total interest paid. Financial experts generally recommend keeping auto loans to 60 months or fewer to avoid becoming "upside-down" on the loan.
Why "Out-the-Door" Price Matters
When negotiating at a dealership, always negotiate the "out-the-door" price rather than the monthly payment. Dealerships can manipulate loan terms (extending 60 months to 72 or 84) to make a more expensive car seem affordable on a monthly basis. By using this calculator, you can see the Total Cost of Car including all interest, ensuring you understand the true price tag of your new vehicle.
Tips for Lowering Your Payment
If the calculated monthly payment is higher than your budget allows, consider these strategies:
Increase your down payment: Aim for at least 20% down to secure better interest rates and reduce loan-to-value ratio.
Improve your credit score: Borrowers with scores above 720 typically qualify for 0% to 2.9% APR promotions.
Shop for financing first: Secure a pre-approved loan from a credit union or bank before visiting the dealership. This gives you leverage to negotiate a better rate.