Quick answer
How much will my car payment be?
For a $35,000 car with $5,000 down, a $5,000 trade-in, 6% sales tax and $500 of fees, financing $27,300 with an auto loan at 7.54% APR over 60 months costs about $548 a month. You’d pay about $5,553 in interest over the loan.
- Average new car rate: 7.54% for 60 months (Fed, Aug 2026)
- Trade-in usually reduces the taxable price
- Keep the term to 60 months or less if you can
How is an auto loan payment calculated?
The calculator first works out the amount you borrow. Sales tax is charged on the price minus your trade-in, as in most states. The tax and fees are added to the loan, then your down payment and trade-in are taken off.
Payment = P × r × (1 + r)n ÷ ((1 + r)n − 1)
Here P is the amount financed, r is the APR ÷ 12 ÷ 100, and n is the number of months. This is the same formula a car payment calculator at a bank or dealer uses.
Example: a $35,000 car
With a $5,000 trade-in, the taxable price is $30,000, so 6% sales tax is $1,800. Add $500 of fees and take off $5,000 down and the trade-in, and you finance $27,300. At 7.54% APR over 60 months, that’s about $548 a month and $5,553 of car loan interest. Without the trade-in, you’d finance $32,600 and pay about $654 a month.
How does the loan term change your car payment?
A longer term lowers the monthly payment but raises the total interest. Here is the same $27,300 auto loan at 7.54% APR.
| Term | Monthly payment | Total interest |
|---|---|---|
| 36 months | $850 | $3,289 |
| 48 months | $661 | $4,409 |
| 60 months | $548 | $5,553 |
| 72 months | $473 | $6,724 |
| 84 months | $419 | $7,919 |
Stretching from 60 to 84 months saves about $128 a month but costs about $2,366 more in interest. The calculator’s total cost of the car includes your down payment and trade-in, so you can compare terms on what you really pay.
How can I get a cheaper auto loan?
- Get pre-approved by a bank or credit union before visiting the dealer
- Put at least 10–20% down to avoid owing more than the car is worth
- Compare the total cost, not just the monthly payment
- Look for 0% or low-APR manufacturer offers on new cars
Frequently asked questions
What is the monthly payment on a $35,000 car?
With $5,000 down, a $5,000 trade-in, 6% sales tax, $500 fees and a 7.54% APR over 60 months, the payment is about $548 a month, with about $5,553 of interest.
What is a good auto loan rate right now?
The Federal Reserve’s average for a 60-month new car loan from a bank was 7.54% in August 2026. Buyers with excellent credit, or manufacturer promotions, can get much lower rates.
Is a 72- or 84-month car loan a good idea?
Longer loans lower the monthly payment but cost more interest, and you may owe more than the car is worth for years. Most experts suggest 60 months or less.
Does a trade-in reduce sales tax?
In most US states, sales tax is charged on the price minus the trade-in value, which lowers the tax. A few states tax the full price, so check your state’s rules.
How does a down payment affect my car payment?
Every dollar you put down is a dollar you don’t borrow or pay interest on. On a $35,000 car at 7.54% APR over 60 months, $5,000 down plus a $5,000 trade-in cuts the payment from about $754 to about $548 a month.
How much car can I afford?
A common guideline is to keep total car costs, including the loan payment, insurance and fuel, under about 10% of your gross income. Start from a monthly payment you’re comfortable with, then try different prices and terms in the calculator.