Purchasing a car is a significant financial decision, and understanding how your monthly payment is calculated is crucial. This calculator helps you estimate your monthly car payment, taking into account not only the loan principal and interest but also essential elements like sales tax and additional fees. By inputting the car's price, your down payment, loan term, interest rate, sales tax, and any extra fees, you get a clear picture of your financial obligation.
How the Calculation Works
The calculation involves several steps:
Calculate the Taxable Amount: The sales tax is typically applied to the purchase price of the car after your down payment has been subtracted.
Taxable Amount = Car Price - Down Payment
Calculate Sales Tax Amount: This is the tax applied to the taxable amount.
Sales Tax Amount = Taxable Amount * (Sales Tax Rate / 100)
Calculate Total Loan Amount (Principal): This is the price of the car minus your down payment, plus the sales tax and any additional fees. This is the amount you'll be financing.
Principal (P) = (Car Price - Down Payment) + Sales Tax Amount + Additional Fees
Calculate Monthly Interest Rate: The annual interest rate needs to be converted into a monthly rate.
Monthly Interest Rate (r) = Annual Interest Rate / 100 / 12
Calculate Number of Payments: The loan term in years is converted into the total number of monthly payments.
Number of Payments (n) = Loan Term (Years) * 12
Calculate Monthly Payment (M): The standard formula for an amortizing loan is used:
M = P [ r(1 + r)^n ] / [ (1 + r)^n – 1]
Where:
M = Monthly Payment
P = Principal Loan Amount
r = Monthly Interest Rate
n = Total Number of Payments
Calculate Total Interest Paid: This is the total amount paid over the life of the loan minus the principal amount borrowed.
Total Interest Paid = (Monthly Payment * Number of Payments) - Principal
Calculate Total Cost of Car: This includes the original car price, sales tax, additional fees, and all interest paid over the loan term.
Total Cost of Car = Down Payment + Monthly Payment * Number of Payments
When to Use This Calculator:
Budgeting for a New or Used Car: Helps you understand the true monthly cost before you commit.
Comparing Financing Options: Allows you to see how different interest rates or loan terms affect your payment.
Understanding Dealer Add-ons: Clarifies the impact of fees and taxes on your overall loan amount.
Negotiation Tool: Gives you a solid estimate to compare against dealership offers.
Remember, this calculator provides an estimate. Actual loan terms, fees, and interest rates may vary. Always review your loan agreement carefully with your lender.
function calculateCarPayment() {
var carPrice = parseFloat(document.getElementById("carPrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var salesTaxRate = parseFloat(document.getElementById("salesTaxRate").value);
var additionalFees = parseFloat(document.getElementById("additionalFees").value);
var monthlyPayment = 0;
var totalInterestPaid = 0;
var totalCostOfCar = 0;
// — Input Validation —
if (isNaN(carPrice) || carPrice <= 0) {
alert("Please enter a valid Car Price.");
return;
}
if (isNaN(downPayment) || downPayment < 0) {
alert("Please enter a valid Down Payment.");
return;
}
if (isNaN(loanTerm) || loanTerm <= 0) {
alert("Please enter a valid Loan Term in years.");
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
alert("Please enter a valid Annual Interest Rate.");
return;
}
if (isNaN(salesTaxRate) || salesTaxRate < 0) {
alert("Please enter a valid Sales Tax Rate.");
return;
}
if (isNaN(additionalFees) || additionalFees < 0) {
alert("Please enter a valid amount for Additional Fees.");
return;
}
var taxableAmount = carPrice – downPayment;
var salesTaxAmount = taxableAmount * (salesTaxRate / 100);
// Ensure sales tax isn't negative if down payment exceeds car price
if (salesTaxAmount < 0) salesTaxAmount = 0;
var principal = (carPrice – downPayment) + salesTaxAmount + additionalFees;
// Ensure principal isn't negative
if (principal 0 && monthlyInterestRate > 0 && numberOfPayments > 0) {
// Standard loan payment formula
monthlyPayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
totalInterestPaid = (monthlyPayment * numberOfPayments) – principal;
totalCostOfCar = downPayment + (monthlyPayment * numberOfPayments);
} else if (principal === 0) {
monthlyPayment = 0;
totalInterestPaid = 0;
totalCostOfCar = downPayment;
} else {
// Case for 0% interest or other edge scenarios where formula might break
// For 0% interest, payment is just principal / number of payments
if (monthlyInterestRate === 0 && numberOfPayments > 0) {
monthlyPayment = principal / numberOfPayments;
totalInterestPaid = 0;
totalCostOfCar = downPayment + principal;
} else {
// Fallback or error message if calculation is not possible
monthlyPayment = 0;
totalInterestPaid = 0;
totalCostOfCar = downPayment + principal;
alert("Could not calculate payment with these inputs. Check interest rate and loan term.");
}
}
document.getElementById("monthlyPayment").innerText = "$" + monthlyPayment.toFixed(2);
document.getElementById("totalInterestPaid").innerText = "Total Interest Paid: $" + totalInterestPaid.toFixed(2);
document.getElementById("totalCostOfCar").innerText = "Total Cost of Car (incl. interest): $" + totalCostOfCar.toFixed(2);
}