Auto loan calculator
The real monthly cost of a car: your state's vehicle tax rules, trade-in equity (including what you still owe), rebates and fees. Plus the classic dealer question, low APR or the cash rebate.
Quick answer: A $38,000 new car in Texas with $4,000 down, financed for 60 months at the Federal Reserve's 7.54% average new-car rate, costs about $745 a month with the $2,375 sales tax and fees rolled in, and $7,552 in interest over the loan.
By John Crane, MBA & the Editorial Team · Updated for the 2026 tax year. How we check our numbers
Monthly payment
$744.61
$37,125 financed for 60 months · $4,000 due at signing
| Vehicle after rebate | $38,000 | 78.1% |
|---|---|---|
| Interest | $7,552 | 15.5% |
| Motor vehicle sales tax | $2,375 | 4.9% |
| Doc, title and registration | $750 | 1.5% |
- Amount financed
- $37,125
- Vehicle tax
- $2,375.00
- Total interest
- $7,552
- Due at signing
- $4,000
- Total paid
- $48,677
- Paid off
- Oct 2031
Before you sign
- Down payment and trade equity 11% of price (aim for 20%)
- 60-month term (aim for 48 or fewer)
- Texas: Motor vehicle sales tax at 6.25%. Source
Loan balance
Year by year
| Year | Principal | Interest | Ending balance |
|---|---|---|---|
| 01 to Oct 2027 | $6,352.64 | $2,582.68 | $30,772.36 |
| 02 to Oct 2028 | $6,848.54 | $2,086.78 | $23,923.82 |
| 03 to Oct 2029 | $7,383.16 | $1,552.16 | $16,540.66 |
| 04 to Oct 2030 | $7,959.49 | $975.83 | $8,581.17 |
| 05 to Oct 2031 | $8,581.17 | $354.50 | $0.00 |
How this is calculated
Vehicle tax
Each state's 2026 rules decide what is taxed: some subtract the trade-in and rebate first, some cap the trade-in credit or the tax, and a few (like Virginia and California) tax the full price even with a trade-in. Enter your local rate where county or city taxes apply.
Amount financed
Price − rebate − trade-in equity − down payment + taxes and fees
Trade-in equity is its value minus what you still owe. If you owe more than it is worth, the difference is added to the new loan. Taxes and fees can be financed or paid at signing.
Rebate or low APR
Dealers often offer either a cash rebate or special financing, not both. We compute both loans in full and compare everything you would pay, so the better deal is clear for your rate and term.
Sources
Questions
Is it better to take 0% financing or the cash rebate?
It depends on the rebate size, your outside loan rate and the term. Open Rebate vs low APR: a large rebate with a competitive credit union rate often beats 0%, while a small rebate usually does not.
Does my trade-in lower the sales tax?
In most states, yes: tax is charged on the price minus the trade-in. California, Hawaii, Oklahoma, Virginia and DC give no trade-in credit, Michigan caps it at $12,000, and Ohio allows it only on new vehicles.
How long should a car loan be?
A common guideline is 20/4/10: at least 20% down, four years or less, and a payment under 10% of gross income. Longer terms lower the payment but add interest and raise the risk of owing more than the car is worth.