How this calculator works
Most states charge sales tax on the price minus your trade-in value, which is why trading in can save more than selling privately. A few states tax the full price; check your state.
The amount financed is the price plus tax and fees, minus the trade-in and cash down. The payment uses the standard amortization formula.
Longer terms (72 or 84 months) lower the payment but add interest and raise the risk of owing more than the car is worth.
For new vehicles assembled in the US and bought with a loan from 2025, interest may be deductible on your federal return, up to $10,000 a year with income limits.
Worked example
$35,000 car, $5,000 trade-in, $3,000 down, 7% tax, 7.5% for 60 months
- Sales tax: 7% of $30,000 = $2,100. Fees: $800.
- Amount financed: $35,000 + $2,100 + $800 − $5,000 − $3,000 = $29,900.
- Monthly payment: $599.13. Total interest: about $6,048.
Questions people ask
What is a good car loan term?
Many advisers suggest 60 months or less for a new car and 48 or less for used, so you aren’t paying for the car long after its value has fallen.
Should I take dealer financing or a bank loan?
Get a pre-approval from a bank or credit union first, then let the dealer try to beat it. Compare by APR and total cost, not monthly payment.
Is car loan interest tax deductible?
For 2025 to 2028, interest on a loan for a new, US-assembled personal vehicle can be deducted up to $10,000 a year, reduced above $100,000 of income ($200,000 joint).
Last reviewed October 2, 2026