60-month vs 72-month — which is better?

60 months is the sweet spot for most buyers: lower total interest, and you usually finish paying before the warranty runs out. 72 months drops the monthly payment by 10–15% but raises total interest by ~40% and keeps you underwater (loan balance > car value) for longer. 84-month loans are even worse and are now flagged by the CFPB as a risk indicator.

Should I roll negative equity from my old car into the new loan?

Almost never. Negative equity (you owe more than the trade-in is worth) gets added to the new principal, so you start the new loan already underwater. If you can, pay off the old loan in cash to zero before trading in. If you can't, at minimum match the term — don't stretch a 72-month loan onto your 5-year-old debt.

How is sales tax calculated on a trade-in?

It depends on your state. Most states (including TX, IL, OH) tax only the difference between price and trade-in — the 'trade-in credit'. A few (CA, VA, DC, MI partial) tax the full price. This calculator uses the trade-in-credit convention. Check your state DMV for the exact rule before signing.

Title and registration fees (state-specific, usually $50–$500), gap insurance, extended warranty, and any add-ons the F&I office tries to bundle in. Negotiate these separately — they're optional and usually marked up heavily.

Does the doc fee count toward sales tax?

In most states yes — but this calculator applies tax only to (price − trade-in) to keep the math transparent. The error is small (typically $30–$50) and doesn't change the buy/no-buy decision. Your final buyer's order will be exact.

Auto Loan Calculator

Real monthly payment — including sales tax, doc fee, and trade-in credit.

Buğra SözeriFinance

Updated May 30, 2026 · Published May 30, 2026

Reviewed by Convertitive Finance Desk

Financial disclaimer:This calculator is for educational purposes only and is not financial advice. Auto loan terms, taxes, and fees vary widely by lender and state — confirm every number on the dealer's buyer's order and with a qualified financial professional before signing.

Dealers quote a monthly payment, not a total cost — and the payment they quote often hides the trade-in math, the sales tax base, and the documentation fee inside one number. This calculator unbundles them. It uses the same closed-form amortising-loan formula as the mortgage calculator (M = P · r / (1 − (1 + r)^−n)), with the auto-specific cost stack layered on top: sales tax on price minus trade-in (the majority US rule), plus a flat doc fee rolled into the amount financed. The rate field accepts your quoted APR.

Vehicle price ($)

Down payment ($)

Trade-in value ($)

Loan term (months)

APR (%)

Sales tax (%)

Doc / dealer fee ($)

Sales tax: $2,187.50 · Amount financed: $32,187.50

Monthly payment

$644.97

Total interest

$6,510.79

Total amount paid

$38,698.29

Principal & interest on the amount financed. Excludes registration, title, insurance, and any state-specific fees beyond the doc fee.

How to use

Enter the vehicle price and money down
Use the out-the-door price before tax and fees. Down payment is cash you bring; trade-in value is what the dealer credits for your old car.
Pick a term and enter APR
Common US terms are 36, 48, 60, and 72 months. APR depends on credit tier and lender — get it from your pre-approval letter, not the dealer's monthly-payment quote.
Add sales tax and doc fee
Sales tax % is your state/county combined rate. The doc fee is a flat dealer charge — it varies wildly (from ~$80 in capped states like CA to $700+ in FL/TX).
Read the schedule
The amortization schedule shows how much of each payment goes to interest vs principal. In the first year of a 72-month loan, more than half typically goes to interest.

Quick reference

Each example assumes $0 trade-in, $499 doc fee, and 6.25% sales tax.

Price	Down	APR	Term	Monthly	Total interest
$30K	$5K	6.5%	60mo	$534	$4,540
$30K	$5K	7.5%	72mo	$478	$6,407
$45K	$8K	6.9%	60mo	$770	$7,067
$45K	$8K	8.5%	72mo	$692	$10,816

Frequently asked questions

60-month vs 72-month — which is better?: 60 months is the sweet spot for most buyers: lower total interest, and you usually finish paying before the warranty runs out. 72 months drops the monthly payment by 10–15% but raises total interest by ~40% and keeps you underwater (loan balance > car value) for longer. 84-month loans are even worse and are now flagged by the CFPB as a risk indicator.
Should I roll negative equity from my old car into the new loan?: Almost never. Negative equity (you owe more than the trade-in is worth) gets added to the new principal, so you start the new loan already underwater. If you can, pay off the old loan in cash to zero before trading in. If you can't, at minimum match the term — don't stretch a 72-month loan onto your 5-year-old debt.
How is sales tax calculated on a trade-in?: It depends on your state. Most states (including TX, IL, OH) tax only the difference between price and trade-in — the 'trade-in credit'. A few (CA, VA, DC, MI partial) tax the full price. This calculator uses the trade-in-credit convention. Check your state DMV for the exact rule before signing.
What's not included?: Title and registration fees (state-specific, usually $50–$500), gap insurance, extended warranty, and any add-ons the F&I office tries to bundle in. Negotiate these separately — they're optional and usually marked up heavily.
Does the doc fee count toward sales tax?: In most states yes — but this calculator applies tax only to (price − trade-in) to keep the math transparent. The error is small (typically $30–$50) and doesn't change the buy/no-buy decision. Your final buyer's order will be exact.

About

The formula

Same closed-form as a mortgage: M = P · r / (1 − (1 + r)^−n), where P is the amount financed (price − down − trade-in + sales tax + doc fee), r is the monthly rate (APR / 12 / 100), and n is the number of months.

Amortization in plain English

Each month's payment is part interest, part principal. Interest is computed on the remaining balance, so it shrinks every month — and principal grows. On a 72-month loan at 7.5%, the first payment is roughly 50% interest; the last is roughly 1%.

PITI doesn't apply here

Unlike a mortgage, an auto loan doesn't escrow taxes or insurance. The monthly payment shown is what you owe the lender. Insurance, registration, fuel, and maintenance are separate — budget another 30–60% on top depending on the vehicle.

Sources & references

Authoritative references behind the math, constants, and tables on this page. Verified by Buğra Sözeri on the dates shown and re-checked at every deploy.

Edmunds — auto loan calculator methodology — Industry-standard amortising-loan math; reference for trade-in and sales-tax conventions(as of 2026-05-30)
NADA — National Automobile Dealers Association — Source for typical doc fee ranges and finance & insurance product disclosures(as of 2026-05-30)
CFPB — Consumer Financial Protection Bureau auto loan guide — Regulatory guidance on APR disclosure, negative equity, and long-term loan risk(as of 2026-05-30)

Related guide

Beyond the monthly payment: how dealers structure APR vs money factor, when a longer term saves cash flow but costs you on resale, and what to push back on in the F&I office. The auto-loan guide walks the negotiation, not just the math.

Read: Auto loan calculator guide →