Car Payment Calculator

The loan comes from the payment run backwards: loan = payment / f, where f is the monthly payment on one dollar borrowed at your rate and term. The price then has to absorb tax and fees. Since tax is charged on the price less the trade-in, the price appears on both sides, and rearranging gives price = (loan - fees + down + trade x taxRate) / (1 + taxRate).

What payment can I actually afford?

A common rule is that all car costs - payment, insurance, fuel and maintenance - stay under 15 to 20 percent of take-home pay. The payment alone is usually about half of that total, so on 4,000 a month take-home, a payment near 300 to 400 leaves room for the rest.

Why does the dealer keep asking what monthly payment I want?

Because a payment target can be met by changing the term, the rate or the price, and only one of those helps you. Answer with a price, agree it, and discuss financing afterwards - the two negotiations are easier to win separately.

Does a longer term let me buy more car?

Yes, and that is the trap. Going from 60 to 84 months raises what a fixed payment can borrow by roughly a quarter, while adding two more years of interest and two more years of owing more than the car is worth.

Should I put more down or keep the cash?

Enough down to avoid being underwater is worth it - roughly 20 percent on a new car. Beyond that, cash in hand is worth more than a slightly smaller payment, especially if your emergency fund is thin.