Car Loan Calculator
Monthly payment on a vehicle after deposit, trade-in and sales tax.
How it works
Car finance has a trap that mortgages do not: negative equity. If you still owe more on your trade-in than it is worth, the difference gets rolled into the new loan. You then borrow more than the new car is worth, and the same thing happens next time, only worse.
Cars also depreciate fastest in the first two years, so long terms leave you underwater for most of the loan. A 84-month term on a car that loses 20% in year one is a long time spent owing more than you own.
Common questions
Is a longer term a bad idea?
It lowers the monthly payment and raises everything else — total interest, time spent in negative equity, and the chance you are still paying when the car needs replacing.
Should I finance the sales tax and fees?
You are then paying interest on tax. If you can pay those in cash, do.