What car payment results after down payment, trade-in and sales tax?
An auto-loan payment begins with the amount financed, not merely the sticker price. Down payment and trade-in reduce financing, while sales tax can increase it depending on the entered treatment.
Finding the amount actually financed
Sales tax is calculated from vehicle price. Down payment and trade-in value are then subtracted from price plus tax to determine the amount financed.
The financed amount is amortised using the entered annual rate and term. Total vehicle cost combines upfront amounts and scheduled payments; registration, insurance, dealer fees and trade-in debt are not included.
Vehicle balance followed by loan amortisation
Tax = Price × Sales tax% ÷ 100Amount financed = Price + Tax − Down payment − Trade inPayment = Amount financed × i ÷ [1 − (1 + i)⁻ⁿ]Price, trade-in, tax and down payment
The default example builds the financed balance from vehicle price, tax, down payment and trade-in before applying the amortising loan formula.
Loan payment versus total vehicle cost
Monthly payment responds to both financing amount and loan terms. Total vehicle cost also includes cash or trade value contributed outside the loan.
Dealer items missing from a simple quote
Dealer quotes may include registration, documentation fees, add-ons or negative trade equity. Those amounts must be reflected in an input to appear in the result.
- Tax is calculated from the base represented in the formula.
- The loan uses a fixed annual rate and monthly payments.
- Dealer fees, insurance, rebates and negative equity are excluded.
Calculations related to auto loan
The following tools examine neighbouring parts of the same calculation without changing the inputs or assumptions used above.
Quick answers
Frequently asked questions
Does a trade-in reduce the amount financed?
Yes. The entered trade-in value is subtracted along with the down payment.
Is sales tax calculated before the down payment?
Yes. This formula applies the tax rate to vehicle price, then subtracts down payment and trade-in.
Are dealer fees and insurance included?
No. Only the displayed price, tax, down payment, trade-in, rate and term inputs are used.
Educational content only. This guide is not financial advice.