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Use the same price basis when comparing different loan offers.
$
Use 0 for a genuine zero-rate offer or a value such as 6.5 for 6.5%.
% APR
The combined term must be from 1 through 120 months.
years
A larger down payment reduces the amount financed; keep enough cash for other ownership costs.

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Use the written trade allowance, not an estimated private-sale value.
$
Use the current payoff quote, or 0 when the trade is owned free and clear.
$
Enter only a cash credit applied to this purchase.
$
Enter the expected vehicle tax rate, or 0 to exclude sales tax.
%
Combine only the flat charges included in this financing comparison.
$
On subtracts the trade allowance from the modeled taxable base.
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Off moves estimated tax and flat fees to cash due at signing.
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Keep 0 for the scheduled payment only.
$/ month
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APR Calculator Estimate APR from loan proceeds and finance charges across regular payment schedules, including a different final installment and note-rate comparison.
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A vehicle's price becomes a loan only after the rest of the deal is accounted for. Cash down, rebates, and positive trade equity can reduce the balance. Negative trade equity, sales tax, and fees can increase it. The result is the amount financed, which is the principal used to calculate payments and interest.

Monthly payment is useful for budgeting, but it can hide an expensive structure. Extending the term spreads principal across more months and usually lowers the bill while increasing total interest. Rolling an old loan balance or one-time charges into the new loan also makes them interest-bearing.

Annual percentage rate (APR)
The yearly credit-cost measure used here to derive a monthly rate.
Positive trade equity
The amount by which the trade allowance exceeds the old loan payoff; it reduces the new principal.
Negative equity
The amount by which the old payoff exceeds the trade allowance; it is added to the new principal in this model.
Amortization
The monthly process in which interest is charged on the remaining balance and the rest of the payment reduces principal.

Tax treatment can change by location and transaction. Some jurisdictions allow a trade allowance to reduce the taxable base, while rebate treatment and government fees can follow different rules. A comparison is meaningful only when every offer uses the same price basis and verified tax assumptions.

Financing is only part of affordability. Insurance, registration, fuel, maintenance, repairs, and depreciation sit outside the payment schedule. A low monthly payment is not enough evidence that the vehicle or loan is affordable.

How to Use This Tool:

Recreate the written deal as closely as possible, then compare offers without changing the assumptions between them.

  1. Enter Vehicle price, APR, and a combined Loan term from 1 through 120 months.
  2. Add the Down payment as dollars or percent, plus any Rebate or incentive that is actually applied to the purchase.
  3. Enter the written Trade-in value and current Trade-in loan payoff. Their difference determines positive or negative equity.
  4. Set the estimated sales-tax rate and flat title or dealer fees. Turn Trade-in reduces tax base on only when the transaction's tax rules support that treatment.
  5. Choose whether to Finance tax and fees. Turning it off moves those costs to Due at signing instead of principal.
  6. Enter Extra monthly principal to test faster payoff, then compare Scheduled payment, Planned payment, Estimated finance charge, and Modeled payoff.

Interpreting Results:

Planned monthly payment includes optional extra principal. Read it with Amount financed, Total of payments, and Estimated finance charge. The total of payments is principal plus modeled interest; it excludes cash due at signing and ownership costs.

  • Trade equity effect shows whether the old vehicle reduces the new balance or carries old debt into it.
  • Due at signing combines down payment with tax and fees that are not financed.
  • Modeled payoff can be shorter than the contractual term when extra principal is included.
  • Balance path compares the planned balance with the no-extra-principal schedule at six-month checkpoints.

A close-looking payment is not enough to confirm a quote. Compare the result with the lender's written disclosure, especially APR, amount financed, finance charge, total of payments, payment count, and payment amount. Differences can expose tax assumptions, add-on products, fees, or payment rules that the estimate does not include.

Technical Details:

The model builds principal before it amortizes the loan. Down payment and rebate are capped at the vehicle price. Trade value above the old payoff becomes positive equity; payoff above trade value becomes negative equity. Estimated tax and fees either enter principal or remain due at signing.

Formula Core:

The amount financed is passed to the ordinary fixed-payment annuity equation. A separate zero-rate rule prevents division by zero.

X = max(0,P-R-T) S = X×s/100 Q = P-R-D-E++E-+F r = APR/10012 M = Qr1-(1+r)-n M when r=0 = Q/n

P is vehicle price, R is the applied rebate, T is the trade allowance used for a tax credit when enabled, X is taxable base, s is sales-tax percent, S is sales tax, D is down payment, E+ is positive trade equity, E− is negative equity, and F is financed tax plus fees. Q is amount financed, r is monthly rate, n is term in months, and M is scheduled payment.

The planned payment is M plus extra monthly principal. Each month, interest equals the current balance times r; the remaining payment reduces principal. The final payment is capped at the remaining balance, so it can be smaller than the regular planned amount.

Rule Core:

RuleApplied behaviorConsequence
Trade tax creditSubtracts trade allowance from taxable base when enabled, capped at vehicle priceIt uses trade value for tax, not trade equity after payoff.
Financed chargesSales tax plus flat fees enter principalThose charges accrue interest.
Upfront chargesSales tax plus flat fees move to cash due at signingThey do not enter principal.
Long term cueTerm greater than 60 monthsDecision guidance recommends comparing a shorter term.
Valid principalAmount financed must be greater than zeroNo payment schedule is produced when credits cover the modeled balance.

A $36,500 vehicle with 10% down, a $1,500 rebate, a $9,000 trade with $6,500 owed, 6.25% sales tax, and $720 in financed fees produces $31,195 of principal when the trade tax credit is enabled. At 5.9% APR for 72 months, scheduled payment is about $515.52. Adding $125 of monthly principal raises the planned payment to about $640.52, shortens modeled payoff to 56 months, and saves about $1,370.74 of interest.

The schedule keeps full precision and formats currency to cents afterward. Lender figures can differ because of first-payment timing, daily interest, rounding policy, late or skipped payments, add-on products, or prepayment terms.

Responsible Use Note:

This is an educational estimate, not financial advice, credit approval, or a binding disclosure. It does not verify taxes, lender fees, contract terms, credit eligibility, or whether extra payments are applied as principal.

  • Confirm every amount against the retail installment contract and Truth in Lending disclosure before signing.
  • Ask where negative equity appears and whether optional products or warranties have been rolled into the balance.
  • Check for prepayment restrictions and how the lender posts extra amounts.
  • Budget insurance, registration, fuel, maintenance, repairs, and depreciation separately.

References: