A worked example
A $35,000 vehicle with a $3,000 down payment, a $5,000 trade-in, and 7% sales tax on the trade-adjusted price comes to $29,100 financed. At 6.5% APR over 5 years, that's about $569 a month, with roughly $5,060 in total interest over the life of the loan.
Frequently asked questions
Why does the trade-in value reduce my sales tax, not just the price?
Most US states only charge sales tax on the difference between the vehicle price and your trade-in value, treating the trade-in as a credit against the purchase rather than separate income. A handful of states tax the full price regardless — check your specific state's rule if this matters for your budget.
Should I put my trade-in toward the down payment or just reduce the loan?
Mechanically they work out the same in this calculator — both reduce the amount financed. The practical difference comes down to dealer paperwork and whether you'd rather sell the trade-in privately for potentially more money instead.
Why is my interest rate higher than advertised rates I've seen?
Advertised low rates are usually reserved for the strongest credit tiers and sometimes only certain models or terms. Your actual rate depends on credit score, loan term, and whether you finance through the dealer or your own bank or credit union — it's worth comparing more than one offer.
This calculator provides estimates for general informational purposes only and is not financial advice. Actual rates, fees and tax treatment depend on your lender, dealer and state.