Using the Auto Loan Calculator Texas
Buying a vehicle in the Lone Star State involves more than just the sticker price. Our auto loan calculator texas is designed to help you navigate specific regional factors like the standard 6.25% motor vehicle sales tax and trade-in tax credits. By entering your vehicle details, you can estimate your monthly payments and see exactly how much you will owe over the life of the loan.
This tool allows you to factor in down payments, trade-in values, and local registration fees to provide a comprehensive look at your financing options.
- Vehicle Price
- The negotiated purchase price of the vehicle before taxes, fees, or down payments.
- Trade-In Value
- The amount the dealer is giving you for your old vehicle. In Texas, you only pay sales tax on the difference between the new car price and the trade-in value.
- Texas Sales Tax (%)
- The default rate for motor vehicles in Texas is 6.25%. Some local jurisdictions may apply additional small fees, but 6.25% is the state standard.
How the Texas Auto Loan Calculation Works
Calculating an auto loan in Texas requires understanding how taxes and trade-ins interact. Texas law allows for a "trade-in credit," which reduces the taxable amount of your new purchase. The formula for the principal loan amount used in this calculator is:
Loan Principal = (Vehicle Price – Trade-In – Down Payment) + Texas Sales Tax + Fees
Once the principal is determined, we apply the standard amortizing loan formula:
- P: Principal loan amount
- i: Monthly interest rate (Annual Rate / 12)
- n: Total number of months (Loan Term)
- PMT: P * [i(1+i)^n] / [(1+i)^n – 1]
Texas Auto Loan Example
Example Scenario: You are buying a new truck in Dallas for $45,000. You have a trade-in worth $10,000 and a $5,000 cash down payment. You qualify for a 6% interest rate over 72 months.
Step-by-step breakdown:
- Taxable Amount: $45,000 (Price) – $10,000 (Trade) = $35,000
- Texas Sales Tax (6.25%): $35,000 * 0.0625 = $2,187.50
- Amount Financed: ($45,000 – $10,000 – $5,000) + $2,187.50 + $150 (Fees) = $32,337.50
- Monthly Payment: Using the formula at 6% for 72 months, the payment is approximately $536.21.
- Total Interest Paid: Over 6 years, you will pay roughly $6,269 in interest.
Texas Vehicle Financing FAQs
What is the sales tax on cars in Texas?
The Texas Comptroller's office sets the motor vehicle sales and use tax at 6.25% of the sales price, minus any trade-in allowance. This applies to both new and used vehicles purchased from a dealer or private party.
Can I roll my Texas sales tax into my car loan?
Yes, most lenders in Texas allow you to include the sales tax, title, and registration fees into the total financed amount. This is often referred to as "rolling in the taxes." Our auto loan calculator texas includes a checkbox for this specific option.
Does a trade-in reduce my sales tax in Texas?
Yes, Texas is one of many states that offers a sales tax credit for trade-ins. You only pay the 6.25% tax on the "net" price after the trade-in value has been subtracted from the purchase price, which can save you hundreds or even thousands of dollars.
What are the typical title and registration fees in Texas?
While fees vary slightly by county (such as Harris, Dallas, or Travis), typical registration fees range from $50 to $65 for passenger vehicles. Title fees are usually around $28 to $33. Dealers may also charge a documentary fee, which is capped at a "reasonable" amount by the state, often between $150 and $200.