How it works
The amount you borrow is the price plus sales tax, minus your down payment and trade-in. In most US states the tax is charged on the price after the trade-in is deducted, which is how this calculator works; if your country already includes VAT in the price, set the sales tax to 0.
M = L × r ÷ (1 − (1 + r)−n)
- M — monthly payment
- L — amount financed
- r — yearly rate ÷ 12 ÷ 100
- n — number of monthly payments
Longer terms lower the payment but raise the total interest. On a 30,000 loan at 7.5%, moving from 60 to 72 months cuts the payment by about 80 a month and adds roughly 1,300 of interest, and the car loses value faster than a 72-month loan is paid down in the early years.