Purchasing a vehicle is often the second largest financial decision a person makes, right after buying a home. Our Auto Loan Calculator is designed to provide transparency into the true cost of car ownership. By factoring in sales tax, trade-in values, and varying interest rates, you can better budget for your new or used vehicle purchase.
Key Factors That Affect Your Car Payment
When calculating your monthly auto payment, several variables play a crucial role beyond just the sticker price of the car:
Vehicle Price & Sales Tax: The base price of the car is just the start. State and local sales taxes can add thousands to the final loan amount. This calculator applies tax to the full vehicle price to give a conservative estimate of the total amount financed.
Down Payment & Trade-In: Putting money down or trading in an old vehicle reduces the principal loan amount. This not only lowers your monthly payment but also significantly reduces the total interest paid over the life of the loan.
APR (Annual Percentage Rate): Your credit score largely determines your interest rate. Even a 1% difference in APR can save or cost you hundreds of dollars over a 60-month term.
Loan Term: Extending your loan term from 60 to 72 or 84 months will lower your monthly payment, but it increases the total interest you pay and puts you at higher risk of becoming "upside-down" on your loan (owing more than the car is worth).
How to Use This Calculator Effectively
To get the most accurate estimate, gather your financial documents before starting. Check your local DMV for current sales tax rates in your area. If you plan to trade in a vehicle, research its current market value using trusted third-party resources. Enter these figures into the fields above to see how different down payments or loan terms impact your monthly budget.
The 20/4/10 Rule for Buying a Car
Financial experts often recommend the 20/4/10 rule to ensure car affordability:
20% Down: Aim to put at least 20% down to cover immediate depreciation.
4 Years: Try to limit financing to 4 years (48 months) to clear the debt quickly.
10% of Income: Keep total transportation costs (payment, insurance, gas) under 10% of your gross monthly income.
Use the results section above to see if your potential purchase fits within these healthy financial parameters.
function calculateAutoLoan() {
// Retrieve values from inputs
var priceInput = document.getElementById("vehiclePrice").value;
var taxInput = document.getElementById("salesTax").value;
var downInput = document.getElementById("downPayment").value;
var tradeInput = document.getElementById("tradeInValue").value;
var rateInput = document.getElementById("interestRate").value;
var termInput = document.getElementById("loanTerm").value;
var errorDisplay = document.getElementById("errorDisplay");
var resultsArea = document.getElementById("resultsArea");
// Parse values, defaulting to 0 if empty
var price = parseFloat(priceInput) || 0;
var taxRate = parseFloat(taxInput) || 0;
var downPayment = parseFloat(downInput) || 0;
var tradeIn = parseFloat(tradeInput) || 0;
var interestRate = parseFloat(rateInput) || 0;
var months = parseInt(termInput) || 60;
// Validation
if (price <= 0) {
errorDisplay.style.display = "block";
errorDisplay.innerHTML = "Please enter a valid Vehicle Price.";
resultsArea.style.display = "none";
return;
}
errorDisplay.style.display = "none";
// Calculation Logic
// 1. Calculate Tax Amount (Typically applied to the Price before trade-in in many states, though this varies. We assume Tax on Price for safety.)
var taxAmount = price * (taxRate / 100);
// 2. Calculate Total Loan Amount (Principal)
var loanAmount = (price + taxAmount) – downPayment – tradeIn;
if (loanAmount <= 0) {
// No loan needed logic
document.getElementById("monthlyPayment").innerHTML = "$0.00";
document.getElementById("totalLoanAmount").innerHTML = "$0.00";
document.getElementById("totalInterest").innerHTML = "$0.00";
document.getElementById("totalCost").innerHTML = "$" + (price + taxAmount).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultsArea.style.display = "block";
return;
}
// 3. Calculate Monthly Payment
var monthlyPayment = 0;
var totalInterest = 0;
var totalCost = 0;
if (interestRate === 0) {
// Simple division if 0% APR
monthlyPayment = loanAmount / months;
totalInterest = 0;
} else {
// Amortization Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
var monthlyRate = (interestRate / 100) / 12;
var mathPower = Math.pow(1 + monthlyRate, months);
monthlyPayment = loanAmount * ((monthlyRate * mathPower) / (mathPower – 1));
totalInterest = (monthlyPayment * months) – loanAmount;
}
totalCost = (monthlyPayment * months) + downPayment + tradeIn;
// Display Results
document.getElementById("monthlyPayment").innerHTML = "$" + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("totalLoanAmount").innerHTML = "$" + loanAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("totalInterest").innerHTML = "$" + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("totalCost").innerHTML = "$" + totalCost.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Show Results Area
resultsArea.style.display = "block";
}