The maths, with your numbers
What paying extra would do
Every dollar above the payment comes straight off the balance, so the interest stops being charged on it. These are worked out from the loan above.
How the balance falls
The same loan over different terms
| Term | Payment | Total interest | Total repaid |
|---|
A longer term lowers the payment and raises the interest. Your loan is highlighted.
Amortization schedule
Where each payment goes, from the first to the last.
Two thirds of what makes a car loan expensive happens before the loan: the trade-in, the tax, the fees and anything still owed on the old car. This page works that part out first, then runs the loan on the number that actually gets financed.
Sales tax and the trade-in
Most states charge sales tax on the difference between the new car's price and your trade-in, which is a real saving: on a $38,000 car with a $12,000 trade-in at 6%, the credit is worth $720.
Some states tax the full price instead. California is explicit that a trade-in allowance “cannot be excluded from the amount on which tax is based”, and Virginia's code says no credit is allowed for a trade-in. Michigan allows a credit but caps it, at $12,000 for 2026. Kentucky, which appears on a lot of out-of-date lists, has allowed the credit on new vehicles since 2014. Five states have no statewide sales tax at all: Alaska, Delaware, Montana, New Hampshire and Oregon.
Because the rules and rates change, we ask for your rate rather than guessing it. Your state revenue department or DMV publishes both the rate and the trade-in rule.
Negative equity is the thing to watch
If you owe more on the old car than it is worth, the difference usually gets added to the new loan. The CFPB studied this and the numbers are stark: loans carrying negative equity averaged 119% loan-to-value, against 89% for loans with a positive-equity trade-in. They were financed for longer (73 months against 67), at higher rates (7.7% against 6.1%), and were more than twice as likely to be assigned to repossession within two years.
Enter what you still owe above and the calculator shows the effect rather than hiding it.
Fees, add-ons and the long term
- Documentation fees are capped in some states and unregulated in others. New York, for example, caps the dealer's fee at $175 plus the actual title and registration costs.
- Extended warranties, GAP insurance and similar products are optional. The CFPB's wording is plain: generally you cannot be required to buy them to get the loan. Financing them adds interest to the price.
- Long terms are now normal and still expensive. Experian put the average new-car loan at 69 months in the first quarter of 2026, with over a third of new-car loans running longer than six years. The term table above prices the difference.
Where the default rate comes from
The starting rate is the Federal Reserve's average for a 60-month new car loan at commercial banks, 7.14% in the second quarter of 2026. The same release puts 72-month loans at 6.97% and finance-company loans at 6.3%, with an average amount financed of $41,705.
Quick answers
What is the monthly payment on a $30,000 car loan?
At 7.14% over five years it is about $596 a month. Enter the price, trade-in, tax and fees above for the figure on your own deal.
Do I pay sales tax on the trade-in value?
In most states you pay tax only on the difference between the new car's price and the trade-in. California and Virginia tax the full price, and Michigan caps the credit.
What happens if I owe more than my car is worth?
The difference is usually rolled into the new loan. CFPB data shows these loans average 119% of the car's value and are more than twice as likely to end in repossession.
Is a 72 or 84 month car loan a bad idea?
It lowers the payment and raises the total cost, and it keeps you upside down for longer. The term table above shows the difference on your loan.
What is a good auto loan rate?
Compare against the Federal Reserve average of 7.14% for a 60-month new car loan at banks in Q2 2026. Credit unions and manufacturer offers can beat it.
Sources
- Federal Reserve G.19, Terms of Credit (new car loan rates and amounts, Q2 2026)
- CFPB, Negative Equity in Auto Lending (June 2024)
- California CDTFA Publication 34, trade-ins and sales tax; Virginia Code § 58.1-2405; Kentucky Department of Revenue, motor vehicle usage tax
- New York DMV, dealer documentation fee cap
- CFPB, optional add-on products
- Experian, State of the Automotive Finance Market, Q1 2026