Auto Loan Amortization Calculator
Auto loans are simple-interest loans: each month, interest accrues on the remaining principal balance. This means early payments hit mostly interest; later payments hit mostly principal. This calculator builds the financed amount the way a dealer actually does — rolling sales tax (on the price minus your trade-in, in most states) and fees into the loan — then generates the full month-by-month amortization schedule, the total interest you'll pay over the loan's life, and your true all-in cost.
price + tax + fees − down − trade-in
over 60 months
on $32,000 taxable
down + all payments
Blue = principal you borrowed. Orange = interest the lender keeps. Total of payments: $34,497.
View the TypeScript implementation on GitHub: packages/calc/src/auto-loan.ts · view tests
What this means
The number on the window sticker is almost never the number you finance. By the time the dealer rolls in sales tax and a doc fee and nets out your down payment and trade-in, the amount actually being amortized can be thousands of dollars off the price you negotiated. That gap is where the real cost of the loan hides — because every dollar financed accrues interest at the monthly rate for the entire term, not just the dollars you think of as “the loan.”
In my experience the single most expensive habit in car buying is shopping by monthly payment instead of by total cost. Stretching a $30,000 loan from 60 months to 84 months drops the payment by a hundred dollars or more, which feels like a win at the desk — but it adds years of interest and keeps you underwater (owing more than the car is worth) far longer, because the loan amortizes slower than the car depreciates. I’ve seen buyers who could comfortably afford a 48-month payment talk themselves into an 84-month one purely because the smaller number was on the page in front of them.
Two traps to watch. First, negative equity: rolling the unpaid balance of an old loan into a new one finances a car you no longer own, and the calculator’s amount-financed line shows you exactly how much that inflates the principal. Second, tax on the trade-in: in most states your trade-in lowers the taxable price, but a few states tax the full sticker regardless — flip the toggle to see what that costs you. The levers that actually move total cost are the rate (shop a credit union before the dealer), the term (shorter is almost always cheaper in total), and the size of the financed principal (more down, less rolled-in fees).
Worked example
Take the default deal: a $35,000 vehicle, $5,000 down, a $3,000 trade-in, a 7% sales-tax state that gives the trade-in credit, $500 in doc and registration fees, financed at 6% APR for 60 months.
Taxable amount: $35,000 − $3,000 = $32,000. Sales tax: $32,000 × 0.07 = $2,240. Amount financed: $35,000 + $2,240 + $500 − $5,000 − $3,000 = $29,740— almost $740 more than the “$29,000” you might assume from price minus down minus trade-in, because the tax and fees got rolled in.
Now amortize. With r = 0.06 ÷ 12 = 0.005 and n = 60, the monthly payment is $29,740 × 0.005 × 1.00560 ÷ (1.00560 − 1) = $574.96. Month one’s interest is $29,740 × 0.005 = $148.70, so only about $426 of that first payment touches principal. Over the full term the interest sums to $4,757.45, the total of payments is $34,497.45, and the all-in total cost (with your $5,000 down) is $39,497.45.
I’ve found the most useful sanity check is the total-interest line. At 6% for five years on roughly $30,000 you’re paying about $4,800 to borrow — drop the rate to 4% and that falls to roughly $3,100, a $1,700 swing for a number you can often improve just by getting a credit-union pre-approval before you sit at the dealer’s finance desk.
Frequently asked questions
The information and tools on this website are for general educational purposes only and do not constitute financial, investment, legal, or tax advice. Consult a licensed professional for decisions specific to your situation.