Formulas and sources
Each formula this calculator uses, where it comes from, and what it leaves out. "How it works" shows the same formula with your own numbers.
Monthly car payment
Simple and Schedule modes
- M
- monthly payment
- P
- amount financed
- r
- monthly rate: the annual rate ÷ 12
- n
- number of monthly payments, up to 120
A term in years is rounded to the nearest whole month. At a 0% rate the payment is P ÷ n. Total interest is M × n - P.
Source: Standard formula; no single publisher. After 36 payments, the schedule gives the same interest paid and balance as the CFPB's example of a $20,000 five-year auto loan at 5% [1].
Amount financed
Schedule mode
- P
- amount financed
In Simple mode, P is the car price less the down payment. A negative trade-in adds to P, and P never falls below 0.
Source: Arithmetic; no single publisher.
Sales tax
Schedule mode
With "Tax the full price (no trade-in credit)" ticked, the tax is Car Price × Tax Rate. A down payment never lowers the tax, and a negative trade-in never raises it. The trade-in here is the dealer's credit less what you still owe on the old car. Texas credits the old car's full value, so with a loan on it the tax shown here can be higher than Texas charges.
Source: Based on state rules, which differ. Texas taxes the price after the trade-in [2]; California taxes the full price [3].
Sources
- Consumer Financial Protection Bureau. Quarterly Consumer Credit Trends: Growth in Longer-Term Auto Loans, page 6. November 2017.
- Texas Comptroller of Public Accounts. Motor Vehicle Tax Guide: Trade-Ins. Publication 96-254, March 2026.
- California Department of Tax and Fee Administration. Tax Guide for Motor Vehicle Dealers: Industry Topics, Special Pricing and Incentives, Trade-ins. Undated page, read October 4, 2026.
What this calculator does not cover
- This models a standard fixed-rate auto loan. It does not model lease-versus-buy comparisons, or a promotional 0% APR that ends after an introductory period; for an offer like that, enter one flat rate for the loan's full term. It also leaves out dealer add-ons such as extended warranties or GAP coverage (which covers what you owe above the car's value if it is totaled).
- Sales tax is the one rate you enter. Local rates, taxable dealer fees, rebates and caps differ by state and are not modeled.
Sources checked on .