Auto Loan Calculator 2026
Monthly car payment, sales tax, and 60 vs 72 month comparison
Last updated: November 2025 · APR disclosure required under TILA Regulation Z
Vehicle & Loan Details
Loan Summary
Term Comparison (60 mo vs 72 mo)
| Metric | 60 months | 72 months | Difference |
|---|---|---|---|
| Monthly Payment | $646 | $558 | $89 |
| Total Interest | $6,523 | $7,898 | $-1,374 |
| Total Cost | $43,773 | $45,148 | $-1,374 |
Annual Principal & Interest
Loan Balance Over Time
Understanding Auto Loans
How Auto Loan Interest Is Calculated
Auto loans are simple-interest, amortizing loans. Each monthly payment is split between interest (calculated on the remaining balance) and principal. Early payments are mostly interest because the balance is high; as the balance falls, more of each payment chips away at principal. A $30,000 loan at 7.5% APR over 60 months has a monthly payment of about $601, with roughly $6,063 in total interest. The same loan over 72 months drops the payment to about $518 but raises total interest to roughly $7,294.
Sales Tax, Title, and Registration
Sales tax varies dramatically by state (Oregon, Montana, New Hampshire, Delaware, and Alaska have no state sales tax; California averages 7.25%, Tennessee about 7%). Most states apply tax to the price minus your trade-in value, which can save real money if you trade in. Title and registration fees run $50 to $400 depending on the state. You can either pay these costs in cash at signing or roll them into the loan, the latter is more convenient but adds 6-8% in interest over a 72 month term.
The 20/4/10 Rule
A common car-buying guideline is the 20/4/10 rule: put at least 20% down, finance for no more than 4 years (48 months), and keep total transportation costs (payment, insurance, fuel, maintenance) under 10% of gross income. This rule helps you avoid being underwater on the loan and keeps the vehicle from crowding out other goals. With longer 72-84 month loans becoming common, many buyers exceed safe limits and end up rolling negative equity into their next vehicle.
Credit Score and APR
Your credit score is the single largest factor in the APR you are offered. As of late 2025, a borrower with a 780+ FICO score might qualify for 5-6% on a new car loan, while a sub-620 score can see 14-20% or higher. Boosting your score even 30 points before applying can save thousands. Always get pre-approved from a bank or credit union before visiting the dealer, this gives you a benchmark to compare against the dealer's financing offer.
Frequently Asked Questions
What is the difference between APR and interest rate on a car loan?
The interest rate is the cost of borrowing the principal. APR includes the interest rate plus dealer fees, origination charges, and any other prepaid finance charges expressed as an annualized rate. APR is always equal to or higher than the interest rate and is the best single number for comparing loan offers. Federal Truth in Lending Act (Regulation Z) requires lenders to disclose APR before you sign.
How can I lower my monthly car payment?
Five levers: increase your down payment, extend the loan term (lowers payment but raises total interest), shop for a lower APR (your credit score is the biggest factor), buy a less expensive vehicle, or refinance 6-12 months in if rates drop or your credit improves. Avoid extending past 60 months on a used vehicle to limit being underwater.
Should I roll taxes and fees into the loan?
Rolling sales tax, title, and registration into the loan keeps your upfront cash lower but means you pay interest on those amounts for the entire term. On a $2,500 fee bundle at 7.5% over 72 months you would pay roughly $560 in extra interest. If you can afford the upfront cash, pay fees out of pocket and finance only the vehicle.
When does it make sense to refinance an auto loan?
Refinancing usually pays off when market rates have dropped 1% or more since you originated, your credit score has improved significantly, or you took a high-rate dealer loan and can now qualify with a credit union. Most lenders will refinance after the title is in hand (30-90 days). Be sure the new term does not push you well past the original payoff date.
Is it better to lease or buy a car?
Buying usually wins long-term because you own the asset after payoff. Leasing offers lower monthly payments and a new car every 2-3 years, but you never build equity and mileage overages cost 15-25 cents per mile. Buy if you keep vehicles 6+ years and drive 12,000+ miles annually; lease if you want a new car often and drive predictably.
How does depreciation affect my auto loan?
New cars lose roughly 20% of value in year one and about 60% by year five. If you put little down on a long term, you can owe more than the car is worth (negative equity) for 2-3 years. Gap insurance covers the shortfall if the car is totaled. To avoid being underwater, put at least 20% down and keep terms at 60 months or less.