How the calculation works
Amount financed P = price + entered taxes/fees − down payment − net trade equity. Monthly rate r = annual interest rate ÷ 12 ÷ 100. For n monthly payments, payment = P × r ÷ (1 − (1 + r)^(−n)). At 0% interest, payment = P ÷ n. Interest = total payments − amount financed. Total acquisition cost = price + taxes/fees + interest.
Worked example
A $20,000 price, $1,500 taxes/fees, $2,000 down payment, and $1,000 net trade equity finance $18,500. At 8% fixed annual interest over 60 months, the payment is about $375.11; interest is about $4,006.80. Actual lender rounding can differ.
Enter net trade equity
Use the trade allowance minus any payoff on the old vehicle. This tool accepts nonnegative equity; if you have negative equity, include the amount rolled into the new loan in taxes/fees or price and label that assumption in your own budget. Do not subtract a gross trade allowance while ignoring the payoff.
Compare more than monthly payment
A longer term can lower the payment while increasing total interest. The total-cost output includes the value surrendered as trade equity; it is an economic acquisition total rather than a cash-only total. It excludes insurance, maintenance, fuel, and other ownership costs.
Further reading: CFPB loan terms and cost definitions. Follow the documentation for your actual equipment or loan.
Frequently asked questions
Does the tool calculate sales tax?
No. Enter your estimated taxes and fees in dollars using your jurisdiction and transaction details.
Is APR the same as the interest rate?
Not always. Use the contractual fixed interest rate for this simple model and compare the lender’s actual APR and disclosures separately.
What happens with no amount financed?
A fully funded purchase produces a zero monthly payment and zero interest. Down payment plus equity cannot exceed the entered purchase and fees.