Auto Finance
A car payment is not a mortgage with smaller numbers. Sales tax, dealer fees and whatever is still owed on the trade-in all end up inside the loan, and a long term hides the cost by spreading it. These calculators put the whole deal on one screen.
Calculators in Auto Finance
- Car Loan CalculatorCar payment with trade-in, tax and feesCalculate
- Car Payment CalculatorThe monthly figure on a given price and rateCalculate
- Car AffordabilityWhat car your budget actually supportsCalculate
- Lease vs BuyCompare leasing and financing the same vehicleCalculate
- Auto LeaseMoney factor, residual, and the two halves of the paymentCalculate
- Negative EquityHow far underwater, and the month you surfaceCalculate
- New vs UsedTotal cost of ownership, not the monthly paymentCalculate
Other categories
- Salary & PaycheckWhat you actually take home, and what an offer is really worth.
- Loans & DebtPayments, payoff order, and the true cost of borrowing.
- Mortgage & Real EstateMonthly payment, affordability, refinancing and equity.
- Investing & SavingsHow capital grows, and what a contribution changes.
- Business & AcquisitionWhat a business earns, what it is worth, what it costs to buy.
About auto finance
A car payment is not a mortgage with smaller numbers. Four things make it its own problem, and each is where the money actually goes: the trade-in, sales tax, dealer fees, and depreciation.
A trade-in reduces what you finance — unless you owe more on it than it is worth, in which case the shortfall rolls into the new loan and you start the new car already underwater. Sales tax is charged on the vehicle and is not small, and whether the trade-in reduces the taxable amount depends on which state the dealership stands in. On a $35,000 car with an $8,000 trade-in at 7%, that state line alone is worth $560.
Depreciation is the reason a lease can be cheaper monthly and more expensive overall, and the reason a long loan leaves people owing more than the car is worth for most of its life. It is also why comparing a lease payment to a loan payment is the wrong comparison: a lease payment covers depreciation over the term, a loan payment buys the whole car.
What goes wrong here
Each of these costs real money, and each is avoidable once it is named.
Negotiating the payment instead of the price
A payment can be brought down to almost any figure by extending the term. Agree the out-the-door price first, then treat financing as a separate conversation.
Rolling negative equity forward
The shortfall on the old car does not disappear; it is added to the new loan and accrues interest for its life. It is the main mechanism by which people end up in a cycle of ever-larger car loans.
Comparing lease and loan payments directly
The lease payment is smaller on essentially every vehicle. That tells you which is cheaper this month, not which is cheaper. Compare cash out less whatever you still own at the end.
Taking 84 months to make it fit
If the payment only works over seven years, the honest answer is usually that the car is too expensive — and you will owe more than it is worth for most of that term.
Questions people ask
Many do, several do not, and it is worth checking because the difference is real money. This site asks you for the rate and the treatment rather than shipping a table of them, because rates differ by state and county and they change.
Work out both. A rebate reduces the amount financed immediately and, in most states, the sales tax with it. Promotional financing reduces the interest. Which wins depends on the size of each and the term, so run it once each way and compare the total cost rather than the payment.
No, and the calculator will say so when it is not. Over a typical lease term, leasing often costs less cash, because the buyer is still paying for a car that has already lost much of its value. Buying wins over a long enough horizon for a specific reason: the loan ends and the car does not.