FAQ
How is the monthly car payment calculated?
The standard amortization formula: payment = r×PV ÷ (1 − (1+r)^−n), where PV is the amount financed, r is the monthly rate (APR ÷ 12) and n is the number of months. At 0% APR the payment is simply the amount financed divided by the months.
Does a trade-in reduce sales tax?
In most U.S. states, yes — tax applies to the price after the trade-in credit (and often after rebates). The toggle above lets you switch between both rules; see our guide on trade-ins and sales tax for state specifics.
What is negative equity and how does it affect my loan?
If you owe more on your trade-in than it's worth, the difference rolls into the new loan. Enter both trade-in value and payoff amount and the calculator adds the shortfall to the amount financed.
What does an extra monthly payment do?
Every extra dollar goes straight to principal, which shortens the loan and cuts total interest. Enter any amount in the extra-payment field and the results show interest saved and how much earlier you pay off.