Finance
Car Payment Calculator
Estimate a monthly car payment with sales tax, fees, down payment, and trade-in equity.
Result
Enter your numbers and press Calculate to see the result.
Calculating…
How a car payment is calculated
A car loan is a standard amortising loan, so the payment comes from the same formula as a mortgage. What differs is everything that happens before the formula — tax, fees, and trade-in equity all change the amount you actually finance.
M = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
P is the amount financed, r the APR divided by 12, and n the number of monthly payments. The amount financed is built up like this:
financed = price + sales tax + fees − down payment − trade-in equity
Payments on common amounts
Principal and interest only, at 7.5% APR — the figure people usually mean by "car payment for $30,000".
| Amount financed | 48 months | 60 months | 72 months | Interest at 72 months |
|---|---|---|---|---|
| $20,000 | $483 | $401 | $346 | $4,891 |
| $30,000 | $725 | $601 | $518 | $7,336 |
| $35,000 | $846 | $701 | $605 | $8,559 |
| $40,000 | $967 | $802 | $691 | $9,782 |
| $50,000 | $1,209 | $1,002 | $864 | $12,227 |
Stretching $30,000 from 48 to 72 months drops the payment by $207 and adds about $2,500 in interest. That is the trade the dealer is offering when they ask what monthly payment you are looking for.
How much car can I afford?
The common guideline is 20/4/10: at least 20% down, no more than 4 years of payments, and total vehicle costs — payment, insurance, fuel, maintenance — under 10% of gross income.
| Gross annual income | 10% monthly ceiling | Suggested payment |
|---|---|---|
| $40,000 | $333 all-in | ≈ $200 |
| $60,000 | $500 all-in | ≈ $300 |
| $80,000 | $667 all-in | ≈ $400 |
| $120,000 | $1,000 all-in | ≈ $600 |
The gap between the ceiling and the suggested payment is insurance, fuel, and repairs, which routinely run $150–300 a month and are the reason a payment that "fits" on paper often does not fit in practice.
Trade-in, negative equity, and the tax break
In most US states sales tax is charged on the price after the trade-in allowance, which is a real advantage over selling the old car privately for the same amount. On a $30,000 car with a $10,000 trade-in at 6% tax, you are taxed on $20,000 — a saving of $600.
Negative equity works the other way and is the most expensive mistake in car finance. If your trade-in is worth $8,000 but you still owe $11,000, the $3,000 shortfall is added to the new loan. You then pay interest on a car you no longer own, and start the new loan already underwater.
Note that a few states — including California, Michigan, and Virginia — either limit or do not allow the trade-in tax credit, so check your own state before relying on it.
APR, credit score, and what the rate really costs
APR is the single largest lever after the price itself, and it is set almost entirely by credit score:
| Credit tier | Typical new-car APR | Payment on $30,000 over 60 months |
|---|---|---|
| Excellent (780+) | ≈ 5.5% | $573 |
| Good (660–779) | ≈ 7.5% | $601 |
| Fair (600–659) | ≈ 11% | $652 |
| Poor (below 600) | ≈ 15% | $714 |
Between excellent and poor credit, the same car costs $8,460 more over five years. Rates shown are indicative — actual offers vary by lender, term, and whether the car is new or used, and used-car APRs typically run 1–3 points higher.
Outside the US
The payment formula is identical everywhere; the surrounding rules are not. In Canada, including Ontario, HST or GST/PST applies rather than state sales tax, and the trade-in credit generally works the same way. Terms of 84 and even 96 months are common there, which lowers the payment and raises total interest sharply. Enter your own tax rate and term and the result holds in any currency.
For a loan without tax and trade-in complications, use the loan payment calculator. To check the sales tax portion on its own, the sales tax calculator handles adding and removing tax.
Car Payment Calculator — frequently asked questions
What is the monthly payment on a $30,000 car?
At 7.5% APR, principal and interest come to about $725 over 48 months, $601 over 60 months, or $518 over 72 months. The 72-month option costs roughly $2,500 more in interest.
How much car can I afford on my income?
A common guideline is 20/4/10 — at least 20% down, no more than four years of payments, and total vehicle costs under 10% of gross income. On $60,000 a year that means keeping the payment near $300, since insurance and fuel take the rest.
Does a trade-in reduce sales tax?
In most US states, yes — tax is charged on the price after the trade-in allowance. On a $30,000 car with a $10,000 trade-in at 6% tax that saves $600. A few states including California and Virginia do not allow this credit.
What happens if I owe more than my trade-in is worth?
The shortfall is rolled into the new loan. If the car is worth $8,000 and you owe $11,000, the extra $3,000 is financed — so you pay interest on a car you no longer own and start the new loan underwater.
How much does credit score change a car payment?
A lot. On $30,000 over 60 months, excellent credit at around 5.5% gives $573 a month while poor credit near 15% gives $714 — about $8,460 more over the term.