Monthly Car Payment Calculator
This calculator can be used to estimate the monthly payments on an automobile loan. The calculator requires a total of seven inputs by the user:
- The sales price, or price paid for the car
- The state sales tax rate, if you live in a locale that has a sales tax
- Any down payment made on the vehicle
- The credit applied by the dealer for the value of any used vehicle trade-in
- Whether or not your state provides for a trade-in tax credit – more on this later
- The length of the loan, in months
- The interest rate charged on the loan, not the APR – once again, more on this later
The calculator then provides the user with several sets of information:
- The loan breakdown, which takes the price paid and subtracts down payment or trade-in values, then adds back sales tax to come up with a total loan value
- Estimates for monthly payments, the total amount paid back on the loan, and the total of all interest charges
Better calculators for a better user experience
Online calculators are created by webmasters that often know very little about personal finance and how a process works in the real world. How do we know? Because we look at the calculators that rank high on search engines and we see their mistakes. This website also has a contact page because if anyone spots a problem, or has a suggestion, we’ll make the correction.
It’s the details that make the difference
This calculator has several variables that a user can choose to take advantage of, or they can skip an input. We’ve included as many variables as possible to help users through the thought process. For example, in most states when you trade-in a car you get a sales tax credit. This is true in all states except for California, District of Columbia, Hawaii, Kentucky, Michigan, Montana, and Virginia. If you live in one of these states, then the Trade-In Tax Credit should be set to No.
Our instructions explicitly state not to use the loans annual percentage rate, or APR. The correct approach is to use the interest rate on the loan. The APR is a very useful number, but it adjusts the interest rate to account for additional costs like processing fees. If you use the APR when calculating the monthly payment, it will be wrong. In fact, the monthly payment will be too high. If you’ve been quoted an APR on a loan, that document will also state the interest rate on the loan – which is what you want to use when calculating a monthly payment.
If you haven’t already, give this calculator a try. If you have a suggestion don’t hesitate to reach out and let us know.