Monthly Car Payment Calculator

This monthly car payment calculator works out what you’ll pay each month from the price, your down payment, trade-in, sales tax, fees, the APR and the term. It shows the interest year by year, and it does something most car payment calculators don’t yet: it estimates the federal deduction for car loan interest that applies from 2025 to 2028 on new, US-assembled cars.

About the Monthly Car Payment Calculator

The payment itself is a solved problem, and the Monthly Car Payment Calculator gets it right to the cent. What changed in 2025 is the tax side. Public Law 119-21 lets you deduct up to $10,000 a year of interest on a qualifying car loan, and that changes what a car really costs. None of the car payment calculators we checked on the first page of results mentions it.

• The full deal. Price, down payment, trade-in, what you still owe on the trade-in, sales tax and fees, rolled into the loan or paid up front.
• Interest by tax year. Your first payment month sets which year each payment falls in, which is how the deduction is counted.
• The deduction, by the IRS form. The $10,000 cap and the income phase-out are worked exactly as Schedule 1-A does it.
• Plain reasons. If your car doesn’t qualify (used, assembled abroad, business use), it says so in words.
• The working. The formula with your numbers in it.

The Monthly Car Payment Calculator runs in your browser. Your income and loan details aren’t sent anywhere or stored.

How to use the Monthly Car Payment Calculator

1. Enter the car and the deal. The price, your down payment, your trade-in’s value, and anything you still owe on it.
2. Add tax and fees. Your sales tax rate and any title, registration and dealer fees. Tick whether they go in the loan.
3. Enter the loan. The APR you were quoted, the term, and the month of your first payment.
4. Answer three questions about the car. New? Assembled in the US? For personal use? Then your income and tax bracket.

A worked example

A $35,000 new car, $5,000 down, no trade-in, 7% sales tax, $500 of fees rolled into the loan, 6.9% APR for 60 months, first payment in November 2026. Single, $80,000 income, 22% bracket.

1. Sales tax. 7% of $35,000 is $2,450.
2. Amount financed. $35,000 – $5,000 + $2,450 + $500 = $32,950.
3. Monthly rate. 6.9% ÷ 12 = 0.575%.
4. Payment. $32,950 × 0.00575 ÷ (1 – 1.00575^-60) = $650.90 a month.
5. Interest. Over 60 payments you pay $39,053.72, of which $6,103.72 is interest. Calculator.net gives the same payment and interest within 4 cents, the difference being how each month is rounded.

Now the deduction. Payments in 2026, 2027 and 2028 carry $376.27, $2,029.11 and $1,617.33 of interest: $4,022.71 in all. Income of $80,000 is under the $100,000 line, so all of it is deductible. At a 22% bracket that’s about $885 off your federal tax. The interest you pay in 2029 and later isn’t covered: the rule ends with 2028.

The 2025 to 2028 car loan interest deduction

The IRS calls it qualified passenger vehicle loan interest. Here are the rules, from its own summary of the law.

To check final assembly, look at the window sticker at the dealer, or put the VIN into the NHTSA VIN decoder and read the plant of manufacture. The Monthly Car Payment Calculator asks you to tick the box; it can’t look up a VIN.

How the income limit works

Schedule 1-A works it in whole steps. Take the amount you’re over the line, divide by $1,000, and round up to the next whole number. Each step takes $200 off.

• $101,000 single: one step, $200 off.
• $104,000 single: four steps, $800 off each year. On the example loan the 2026 interest ($376.27) is wiped out, and 2027 and 2028 drop to $1,229.11 and $817.33.
• $105,500 single: 5.5 rounds up to 6 steps, $1,200 off.
• $150,000 single: 50 steps, $10,000 off. Nothing left.

Married couples filing jointly start losing it at $200,000 instead of $100,000, so the same example at $150,000 joint keeps the whole $4,022.71.

Loan term: lower payment, more interest

The same $32,950 at 6.9%, with the deduction figured for a single filer on $80,000:

A longer loan puts more of its interest inside the deduction years, but not enough to make it the cheaper choice. Going from 36 to 84 months adds $5,066.22 of interest and only $1,018.37 of deduction, worth about $224 at 22%.

Interest rate: what each point costs

The same loan over 60 months:

Two points of APR on this loan is about $31 a month and $1,900 over five years. It’s worth getting a quote from a bank or credit union before you sit down with the dealer’s finance office.

How much to put down

Every dollar down is a dollar you don’t borrow or pay interest on. The same $35,000 car at 6.9% over 60 months, with tax and fees in the loan, in the Monthly Car Payment Calculator:

Going from nothing down to $10,000 down saves $197.54 a month and $1,852.42 of interest. A new car also loses value fastest in its first year or two, so a bigger down payment lowers the chance of owing more than the car is worth.

0% financing or a cash rebate?

Dealers often offer one or the other on new cars. Run both in the Monthly Car Payment Calculator and compare the total of payments, not the monthly figure.

• 0% for 60 months on the example: $549.17 a month, $32,950 in all, no interest.
• A $3,000 rebate at 6.9%, taken off the price before tax: you finance $29,740, pay $587.49 a month and $35,249.10 in all.

Here the 0% offer is $2,299.10 cheaper. With 0% there is no interest to deduct, but the deduction on the rebate loan would be worth only a few hundred dollars, so the answer holds. The bigger the rebate and the lower the outside rate, the more likely the rebate wins, which is why it’s worth running your own numbers.

New or used: the payment and the deduction

A used car is usually cheaper to buy and to finance. A $24,000 used car with $5,000 down, the same tax and fees and the same 6.9% over 60 months, comes to $418.39 a month and $3,923.44 of interest. Used-car rates are often higher than new-car rates, so enter the rate you were actually quoted.

What a used car never gets is the interest deduction. The IRS says plainly that used vehicles don’t qualify: the car’s original use has to start with you. The Monthly Car Payment Calculator shows “Not eligible” and says why as soon as you untick “The car is new”.

Trade-ins, sales tax and negative equity

Most states charge sales tax on the price less your trade-in. Trade in a car worth $8,000 on the example and the tax drops from $2,450 to $1,890. Some states tax the full price anyway; tick the box if yours does.

Owing more on your trade-in than it’s worth is common. Say it’s worth $8,000 but you owe $11,000. The $3,000 gap, called negative equity, goes into the new loan. The Monthly Car Payment Calculator then finances $35,390, your payment becomes $699.10, and you pay $6,555.70 of interest, some of it on a car you no longer own.

Rolling tax and fees in, or paying up front

Tick or untick “Put the sales tax and fees in the loan” to compare. Rolled in, the example finances $32,950. Paid up front, it finances $30,000 and you hand over $7,950 on the day, the $5,000 down plus $2,950 of tax and fees. The car costs the same apart from the interest on that $2,950.

Common mistakes

• Shopping by the monthly payment. A dealer can always lower it by stretching the term. Compare total interest and total cost.
• Leaving out tax and fees. On the example they add $2,950 to the loan and $58 a month to the payment.
• Assuming any new car qualifies for the deduction. Final assembly has to be in the US, and plenty of cars sold by US brands are assembled elsewhere.
• Counting the whole loan’s interest as deductible. Only interest paid in 2025 to 2028 counts, and only up to $10,000 a year.
• Treating the deduction as a refund of the interest. It lowers taxable income. At a 22% bracket, $1,000 of deduction saves about $220.
• Forgetting negative equity. Rolling an old loan into a new one hides it in the payment. The calculator shows it on its own line.

How the Monthly Car Payment Calculator works

1. Sales tax on the price less trade-in, or on the full price if you tick the box.
2. Amount financed: price, less down payment and trade-in, plus anything still owed on the trade-in, plus tax and fees if they go in the loan.
3. Payment from the standard formula, rounded to the cent.
4. Schedule. Each month’s interest is the balance times the monthly rate, rounded to the cent. The last payment clears whatever is left, so it can be a few cents off the others.
5. Deduction. For each of 2025 to 2028, the interest paid that year, capped at $10,000, less the income phase-out, if the car qualifies.
6. Tax saved is the deduction times the bracket you pick. It’s an estimate: your real saving depends on your whole return.

What the Monthly Car Payment Calculator can’t tell you

• Your actual rate. That depends on your credit and the lender.
• Every state’s tax rules. Some states tax fees, cap the tax, or charge a different rate on vehicles. Use your state’s vehicle rate.
• Whether a specific car qualifies. Check the assembly plant on the sticker or by VIN.
• Your exact tax saving. The bracket figure is a guide. The deduction is claimed on Schedule 1-A of your return.
• Insurance, fuel and maintenance. They’re real costs of the car, just not part of the loan.

Comparing a car payment with your take-home pay? Our Paycheck Calculator Texas works out net pay after federal tax. Working backwards from a receipt that already includes tax? Use the reverse sales tax calculator. To count the months to a payoff date, try the date duration calculator.