Amount financed
$32,100
Work out the monthly payment on a car loan from the price, your down payment, any trade-in credit and the sales tax rate — and see what happens to the payment and the total interest as the term stretches from 36 months to 84.
Sales tax is applied to the price less the trade-in credit, which is how most states assess it. Fees such as registration, dealer documentation and title are not included; add them to the price field if you want them financed. No rebates, incentives or manufacturer subvented rates are modelled.
| Term (months) | Monthly payment |
|---|---|
| 36 | $993.21 |
| 48 | $770.76 |
| 60 | $637.74 |
| 72 | $549.43 |
| 84 | $486.67 |
The number that drives the payment is not the price of the car. It is the amount financed, and three things stand between the two: money you put down, the credit you receive for a trade-in, and sales tax.
On the default figures — a $35,000 car, $5,000 down, no trade-in and 6% tax — the sales tax is $2,100 and the amount financed is $32,100. That is $2,100 more than most people entering the same numbers would expect, because sales tax is normally financed rather than paid separately, and it then attracts interest for the whole term.
Two mechanics in that formula cause most of the confusion at a dealership. First, sales tax is charged on the price less the trade-in credit in most states, so a trade-in reduces the tax as well as the principal; the credit is worth slightly more than its face value. Second, a trade-in on which you still owe money produces negative equity: the outstanding balance is paid off from the trade-in value, and any shortfall is added to the new loan. That is not modelled here, and it is worth checking before you agree to anything.
Stretching a car loan is presented as a way to make the payment manageable, and it does make the payment smaller. What it also does is keep the balance outstanding for longer, on a vehicle that is losing value the whole time. The table below takes the default $32,100 at 7.14% and runs every common term.
| Term | Monthly payment | Total interest | Interest added versus 36 months |
|---|---|---|---|
| 36 months | $993.21 | $3,655.59 | — |
| 48 months | $770.76 | $4,896.54 | +$1,240.95 |
| 60 months | $637.74 | $6,164.45 | +$2,508.86 |
| 72 months | $549.43 | $7,459.22 | +$3,803.63 |
| 84 months | $486.67 | $8,780.69 | +$5,125.10 |
Moving from 60 months to 84 months saves $151.07 a month and costs $2,616.24 in additional interest. Expressed as a rate of exchange, you are paying about $2,616 to rent $151 a month for two years. That is a poor trade on its own terms, and it becomes worse in combination with depreciation, because by the time the 84-month loan ends the car is typically worth a fraction of what it cost while the balance has only just reached zero.
There is one real-world wrinkle worth knowing, and it comes from the Federal Reserve's monthly consumer credit data. The reported average rate on a 72-month new car loan, 6.97%, is slightly lower than the 7.14% average on a 60-month loan, because longer loans are disproportionately used to finance more expensive vehicles for stronger borrowers. The lower rate does not rescue the longer term. Financing the same $32,100 at 6.97% over 72 months costs $7,270.38 in interest against $6,164.45 over 60 months at 7.14% — $90.93 a month cheaper, and $1,105.92 more expensive overall. A slightly cheaper rate on a substantially longer loan is still a substantially more expensive loan.
The default APR of 7.14% is the Federal Reserve's reported average rate on 60-month new car loans at commercial banks for the second quarter of 2026. It is a good anchor for two reasons. It is a real published series rather than an advertised teaser, and it is broken out by term, which means the rate you are offered can be located against it rather than accepted as given.
The same release reports the average amount financed on a new car loan at $42,504 as of June 2026. That is materially above the $32,100 in the default example here, which means that a large share of new car buyers are financing more than the example and over a longer term. Both effects push total interest up, and they compound each other.
The practical use of this page is therefore not to produce a single number, but to run your offer twice. Enter the rate and term the dealer has quoted, then enter the same amount financed at a term you would prefer and see the interest difference. If the payment at the term you prefer is unaffordable, that is information about the price of the car rather than about the term.
This is a genuine comparison and it can be settled with arithmetic. Price the car with the rebate applied and a normal market rate, then price it at the full price with 0% financing, and compare total interest. The 0% offer usually wins when the rebate is small and the rate you would otherwise pay is high; the rebate wins when it is large. Run both as separate inputs on this page — reduce the price in one, and set the rate to zero in the other.
A down payment reduces the amount financed directly and therefore reduces both the payment and the total interest. The figure worth holding in mind is that a car loses value quickly in its first years, so a small down payment combined with a long term tends to leave the loan balance above the car's value for a sustained period. Driving a car you are underwater on is a financial rather than an arithmetic problem, and this calculator cannot tell you where the line is for a specific vehicle.
As arithmetic, it is always more expensive: on $32,100 at 7.14%, 84 months costs $8,780.69 in interest against $3,655.59 over 36 months. Whether it is a bad idea depends on whether the lower payment is the only way to afford a car you need, which is a question about your situation rather than about the loan. What this page does establish is the exact price of the longer term, so that the decision is made with the number rather than around it.
In most US car purchases it does, and that is why it appears in the amount financed on this page. Sales tax is assessed on the transaction and, unless you pay it separately at the time of purchase, it is rolled into the loan and attracts interest for the full term. On the default figures that is $2,100 of principal you did not intend to borrow. Paying it up front rather than financing it is one of the cheapest decisions available in the whole transaction.
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Cluster us/loans · Unit us-auto-loan-calculator · Engine amortizing-loan / auto · Method: Amount financed is price minus down payment and trade-in credit plus sales tax on the taxable portion; the payment uses the amortizing-loan formula with the term expressed in months.