Put in the price of the car you want, then add the cash you can pay upfront and the value a dealer is giving you for your old car. Enter the interest rate from your loan offer and the number of months you plan to take. The sales tax and fees boxes are optional, but they change the amount you borrow, so it helps to fill them in.
The calculator takes the tax on the price after the trade-in value is removed, which is how many places work. Check your local rules, because some places tax the full price. If that is the case for you, you can raise the fee box slightly to cover the difference.
Press Calculate and you will see the amount you need to finance, the monthly payment, the total interest and the overall cost of the car including your down payment and trade-in. Try a shorter term to see how much interest you save, and a longer one to see how much lower the monthly payment becomes. Seeing both side by side makes it easier to pick a loan you can live with.
First the tax is worked out as (price minus trade-in) x tax rate. The amount financed is price + tax + fees – trade-in – down payment.
The monthly payment then follows the standard loan formula: payment = loan x r / (1 – (1 + r) raised to minus n), with r equal to the yearly rate divided by 1200 and n equal to the number of months. Total interest is payment x n minus the amount financed. The total cost adds your down payment and the trade-in value back to the sum of all payments.