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 Florida's sales tax and accounting for any down payment. This is the standard amortization formula used by lenders.

2. How Does the Calculator Work?

The calculator uses the auto loan payment formula:

Where:

• \( PMT \) — Monthly payment amount
• \( P \) — Principal loan amount
• \( tax \) — Florida sales tax amount
• \( D \) — Down payment amount
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (loan term in months)

Explanation: The formula calculates the fixed payment needed to fully amortize the loan over its term, including both principal and interest.

3. Florida Auto Loan Specifics

Details: Florida has a 6% state sales tax on vehicles, plus potential local taxes. This calculator assumes tax is paid upfront and included in the loan amount.

4. Using the Calculator

Tips: Enter the vehicle price as principal, add Florida sales tax (typically 6-7.5% of vehicle price), subtract your down payment, and enter the loan's APR as a decimal (e.g., 5% = 0.05).

5. Frequently Asked Questions (FAQ)

Q1: What is Florida's sales tax rate for vehicles?
A: Florida has a 6% state sales tax plus potential local taxes (typically 0.5-1.5%), making total tax usually 6.5-7.5%.

Q2: Should I include trade-in value in down payment?
A: Yes, trade-in value reduces the taxable amount and can be included in your down payment (D).

Q3: How do I convert APR to monthly rate?
A: Divide the annual rate by 12 (e.g., 6% APR = 0.06/12 = 0.005 monthly rate).

Q4: Are there other fees I should consider?
A: Florida has title ($77.25), registration ($14.50-$32.50), and potentially dealer fees ($500-$1000).

Q5: What's a typical auto loan term in Florida?
A: Common terms are 36-72 months, with 60 months (5 years) being most typical.