How is a car loan payment calculated?
Your amount financed is the vehicle price plus sales tax, minus your down payment and any trade-in value. That amount is then repaid monthly with interest using the standard loan formula over your chosen term.
Ways to lower your payment
- Put down a larger down payment or trade in a vehicle
- Shop for a lower APR (your credit score matters a lot here)
- Choose a shorter term to cut total interest — even if the monthly is higher
Should I take the longest term for a low payment?
Be careful — long terms (72–84 months) mean much more interest and a higher risk of owing more than the car is worth.
Is sales tax always financed?
It depends on your region and lender. This calculator adds tax to the financed amount; you can set tax to 0 if you pay it upfront.