Auto Loan Calculator Including Tax

Auto Loan Payment Formula:

\[ PMT = (P + tax - D) \times \frac{r(1 + r)^n}{(1 + r)^n - 1} \]

Principal Amount (P):

Tax Amount:

Down Payment (D):

Interest Rate (r):

decimal

Number of Periods (n):

months

Monthly Payment (PMT):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Auto Loan Payment Formula?

The auto loan payment formula calculates the fixed monthly payment required to repay a car loan, including principal, interest, taxes, and any down payment. It provides a standardized way to compare different loan offers.

2. How Does the Calculator Work?

The calculator uses the auto loan payment formula:

\[ PMT = (P + tax - D) \times \frac{r(1 + r)^n}{(1 + r)^n - 1} \]

Where:

\( PMT \) — Monthly payment
\( P \) — Principal loan amount
\( tax \) — Total tax amount
\( D \) — Down payment
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( n \) — Number of monthly payments

Explanation: The formula accounts for the time value of money, calculating the fixed payment needed to amortize the loan over its term.

3. Importance of Accurate Loan Calculation

Details: Understanding your exact monthly payment helps with budgeting and ensures you don't overextend yourself financially when purchasing a vehicle.

4. Using the Calculator

Tips: Enter the vehicle price as principal, add all taxes and fees, subtract your down payment. Use the annual interest rate (as decimal) and loan term in months.

5. Frequently Asked Questions (FAQ)

Q1: Should I include registration fees in the tax amount?
A: Yes, include all mandatory fees and taxes that will be financed in the loan.

Q2: How does a larger down payment affect the monthly payment?
A: A larger down payment reduces the financed amount, resulting in lower monthly payments.

Q3: Why is the interest rate entered as a decimal?
A: Mathematical formulas typically use decimal form (5% = 0.05) for calculations.

Q4: Does this include insurance costs?
A: No, this calculates only the loan payment. Insurance would be an additional monthly expense.

Q5: How accurate is this calculator?
A: It provides the mathematically exact payment, though actual lender calculations may vary slightly due to rounding methods.