Purchasing a vehicle is a significant financial commitment. This Car Loan Amortization Calculator helps you estimate your monthly payments and understand the long-term costs of financing a car. By factoring in the vehicle price, your down payment, trade-in value, interest rate (APR), and sales tax, you can get a clear picture of your budget.
How the Calculation Works
The calculation involves several steps to determine your actual monthly obligation:
Taxable Amount: Sales tax is typically applied to the vehicle price. In some regions, the trade-in value reduces the taxable amount, but this calculator applies tax to the full vehicle price for a conservative estimate.
Principal Loan Amount: This is calculated by taking the vehicle price (plus tax), and subtracting your down payment and trade-in allowance.
Amortization: The formula uses your annual interest rate divided by 12 to get a monthly rate. It then calculates a fixed monthly payment that ensures the loan is paid off exactly at the end of the term.
Key Terms Explained
APR (Annual Percentage Rate): The interest rate you pay on the loan annually. A lower APR significantly reduces your monthly payment and total interest paid.
Loan Term: The duration of the loan in months. Common terms are 36, 48, 60, or 72 months. While a longer term lowers your monthly payment, it usually increases the total interest you pay over the life of the loan.
Down Payment: Money paid upfront. A larger down payment reduces the principal loan amount, lowering both your monthly payment and total interest costs.
Why Use a Car Loan Calculator?
Using a calculator before visiting a dealership empowers you to negotiate better terms. You'll know exactly how much car you can afford and can avoid being "upsold" into a monthly payment that stretches your budget too thin. It also helps you visualize the impact of interest rates—seeing the difference between 3% and 6% interest over 5 years can be eye-opening.
function calculateCarLoan() {
// 1. Get input values using specific IDs
var priceInput = document.getElementById('vehiclePrice').value;
var downPaymentInput = document.getElementById('downPayment').value;
var tradeInInput = document.getElementById('tradeInValue').value;
var interestInput = document.getElementById('interestRate').value;
var termInput = document.getElementById('loanTerm').value;
var taxInput = document.getElementById('salesTax').value;
// 2. Parse values and handle empty inputs as 0 where appropriate
var price = parseFloat(priceInput);
var down = downPaymentInput === "" ? 0 : parseFloat(downPaymentInput);
var tradeIn = tradeInInput === "" ? 0 : parseFloat(tradeInInput);
var interestRate = parseFloat(interestInput);
var months = parseFloat(termInput);
var taxRate = taxInput === "" ? 0 : parseFloat(taxInput);
// 3. Validate Inputs
var errorDiv = document.getElementById('errorMsg');
var resultsDiv = document.getElementById('results');
if (isNaN(price) || isNaN(interestRate) || isNaN(months) || price <= 0 || months <= 0) {
errorDiv.style.display = 'block';
resultsDiv.style.display = 'none';
return;
}
errorDiv.style.display = 'none';
// 4. Calculate Logic
// Calculate Tax Amount (Simple method: Tax on Vehicle Price)
var taxAmount = price * (taxRate / 100);
// Calculate Total Price including Tax
var totalPrice = price + taxAmount;
// Calculate Loan Principal (Amount to be financed)
var loanPrincipal = totalPrice – down – tradeIn;
// Handle case where downpayment + tradein covers the cost
if (loanPrincipal <= 0) {
document.getElementById('monthlyPaymentDisplay').innerText = "$0.00";
document.getElementById('totalLoanDisplay').innerText = "$0.00";
document.getElementById('totalInterestDisplay').innerText = "$0.00";
document.getElementById('totalCostDisplay').innerText = "$" + totalPrice.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultsDiv.style.display = 'block';
return;
}
// Monthly Interest Rate
var monthlyRate = (interestRate / 100) / 12;
var monthlyPayment = 0;
var totalInterest = 0;
if (monthlyRate === 0) {
// 0% Interest case
monthlyPayment = loanPrincipal / months;
totalInterest = 0;
} else {
// Standard Amortization Formula: P * (r(1+r)^n) / ((1+r)^n – 1)
var x = Math.pow(1 + monthlyRate, months);
monthlyPayment = (loanPrincipal * x * monthlyRate) / (x – 1);
var totalPayments = monthlyPayment * months;
totalInterest = totalPayments – loanPrincipal;
}
var totalCost = totalPrice + totalInterest;
// 5. Display Results with formatting
document.getElementById('monthlyPaymentDisplay').innerText = "$" + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalLoanDisplay').innerText = "$" + loanPrincipal.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalInterestDisplay').innerText = "$" + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalCostDisplay').innerText = "$" + totalCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultsDiv.style.display = 'block';
}