New Hampshire auto loan calculator

What the calculator finances, and what it does not

Four numbers set an auto loan payment: the amount financed, the annual rate, the number of months, and, if you choose a state, the sales tax the tool adds to the loan.

The amount financed is not the sticker price. The tool takes the vehicle price, subtracts the down payment, subtracts the trade-in, then adds sales tax charged on the price after the trade-in credit. That last step is why the financed figure can land higher than price minus down payment, and why two people with identical cars and identical down payments can have different payments in different states.

Everything after that is ordinary amortisation. Each month the rate is charged on whatever balance remains, the rest of the payment reduces the principal, and the balance falls a little faster every month than it did the month before. Nothing in the arithmetic is specific to cars.

A worked example, using the tool's own defaults

The calculator opens on a $32,000 vehicle, $4,000 down, no trade-in, 7.5% and 60 months, with no state chosen.

Now pick a state. Using the combined state and average local rate we hold for Ohio, 7.29%, the tool adds $2,333 of sales tax to the deal and finances it. The amount financed becomes $30,333 and the payment becomes roughly $608 a month. The car did not change. The loan did.

A second example, at different inputs

Change every number and the shape of the answer changes with it. Take a $19,000 used car with $2,000 down, a $6,000 trade-in, 9.5% over 48 months, and no state chosen.

Stretch that same $11,000 to 72 months and the payment falls to about $201, which is $75 a month easier, while the interest rises to about $3,474. You would pay roughly $1,209 more to borrow the same money, and you would still be making payments in year six.

Add Ohio to the used-car example and tax is charged on $13,000, the price after the trade-in credit, which comes to $948. Financed alongside the car, it lifts the amount financed to $11,948 and the payment to about $300 a month.

What moves the payment most, in order

If you can only change one thing, change the one nearest the top.

1. The price, and everything rolled into it. Every dollar of price, tax, add-on and old-loan balance is a dollar financed, and it carries interest for the whole term.
2. The down payment and the trade-in. Both come off the amount financed dollar for dollar, and in most states the trade-in lowers the tax as well.
3. The term. It moves the payment hard and the total cost the wrong way. On the default loan, 48 months costs about $677 a month and $4,496 of interest; 84 months costs about $429 a month and $8,076.
4. The rate. Real, but usually smaller over five years than the attention it gets. On $28,000 over 60 months, moving from 5.5% to 9.5% raises the payment from about $535 to about $588 and the interest from about $4,090 to about $7,283.

Does a longer term make a car cheaper?

No. It makes the payment smaller and the car more expensive.

Take the same $28,000 at 7.5%. Over 60 months the payment is about $561. Stretch it to 84 months and the payment drops toward $429, which is the number a salesperson will point at. The interest paid goes the other way, because you are borrowing the same money for two extra years.

The tool adds a warning of its own above 72 months, and it is worth reading. Beyond that point most buyers owe more than the car is worth for much of the term. The payment falls; the risk does not. If the car is written off or you need to sell in year three, the gap between the balance and the value is yours to cover in cash.

Where the sales tax lands

Most states charge sales tax on the price after the trade-in is deducted, which is worth real money when you trade a car in. A handful tax the full price regardless. This tool applies the credit and says so in its caveats, because it holds a combined rate for each state but not each state's trade-in rule.

It also assumes the tax is financed rather than paid up front. That is the common arrangement, not the only one. Paying the tax in cash at signing lowers the amount financed by exactly that figure and removes the interest you would otherwise pay on it for five years.

If you want the tax figure on its own, without a loan wrapped around it, use the sales tax calculator or read the rates by state.

What decides the rate you are offered?

The rate is the input with the widest spread and the least transparency. In broad terms:

• Credit score. The single largest factor. The spread between the best and worst tier on the same car, on the same day, is measured in whole percentage points, not fractions. Our guide on how credit scores work covers what actually moves the number.
• New against used. Used vehicles carry higher rates because the collateral is worth less and depreciates less predictably.
• Term. Longer terms usually carry higher rates as well as more months of interest, so the two effects compound.
• Who is lending. Dealer-arranged financing is a loan the dealer sells on, and the rate you are quoted may include a markup over what the lender approved. A pre-approval from a bank or credit union before you walk in is the only reliable way to know.

For what rate environments look like and how the pieces fit together, see our explainer on auto loan rates.

The mistakes people make in the finance office

Negotiating the monthly payment rather than the price. A payment target can be met by lengthening the term, and often is. Settle the price, the trade-in value and the rate as three separate numbers before anyone mentions a monthly figure.

Rolling negative equity forward. If you still owe more on the old car than it is worth, that balance can be added to the new loan. It does not disappear. You are now paying interest on a car you no longer have.

Treating add-ons as free because they fit the payment. Extended warranties, paint protection and gap insurance are usually financed at the loan rate for the full term.

Assuming the trade-in credit applies. It does in most states. Check your own before counting the tax saving.

What rolling negative equity costs

Suppose you owe $9,000 on the old car and the dealer values it at $6,000. The $3,000 gap does not disappear when you sign. It is added to the new loan.

On the default deal, it turns $28,000 financed into $31,000. The payment rises from about $561 to about $621, and the interest from about $5,664 to about $6,271. So carrying the gap forward costs about $3,607 over five years, and it buys nothing at all, because the car it was borrowed against is no longer yours.

It also starts the new loan underwater, which is how the same problem repeats at the next trade. The ways out are unglamorous: keep the current car until the balance is below what it is worth, or cover the gap in cash. Gap insurance covers the shortfall if the car is written off or stolen. It does not make the debt smaller.

How to check this against a real offer

The figure here is an estimate until you are holding the paperwork. A retail instalment contract carries a disclosure box with four numbers in it, and those are the ones to reconcile:

• Amount financed. It should be the price, less the down payment, less the trade-in, plus tax and anything else rolled in. If it is higher than you expected, something was added.
• Finance charge. The interest in dollars over the full term. Compare it with the total interest line above.
• Total of payments. The payment multiplied by the number of months. Compare it with the total cost line.
• APR. Not always identical to the rate used to work out the payment, because the APR includes certain finance charges. If it sits meaningfully above the quoted rate, ask which charges are inside it.

Then count the payments on the contract and confirm the term is the one you agreed. A payment that matches your target on a term two years longer than you discussed is the most common way a deal quietly changes shape at the desk.

Before you sign the contract

Work down this list with the retail instalment contract and the buyer's order in front of you, not from memory of what was said at the desk.

• Read the APR printed in the disclosure box on the retail instalment contract and confirm it is the rate you were quoted.
• Check the amount financed equals the price, less the down payment, less the trade-in, plus tax and anything else you agreed to add.
• Count the number of payments printed on the contract and confirm the term is the one you discussed, not a longer one that hits the same monthly figure.
• Compare the total of payments on the contract against the total cost line above, and the finance charge against the total interest line.
• Confirm with your state DMV that the trade-in credit applies where the car will be registered before you count the tax saving.
• Ask for title, registration and documentation fees on their own lines, because none of them are inside the figure here.
• If an old loan is being paid off, check the payoff quote on the contract against your current lender's statement and find where any shortfall was added.

Where this calculator stops

It is honest about four things, all of which sit in its own caveats:

1. It excludes title, registration and dealer documentation fees. These are set by state and by dealer, and the documentation fee in particular ranges from trivial to several hundred dollars.
2. It finances the sales tax rather than assuming you pay it separately.
3. It applies the trade-in credit against sales tax, which a few states do not allow.
4. Where we hold no combined rate for the state you picked, it adds no tax at all and tells you so, rather than substituting a national average.

It also assumes a fixed rate and no missed payments, which is what a standard auto loan is. It is not a rent-to-own or lease calculator, and it says nothing about insurance, fuel or maintenance, which over five years often exceed the interest.

What to do with the figure

Use the total cost line rather than the payment line. Two offers with the same monthly figure and different terms are not the same offer, and the total cost is the only place that shows up.

Then compare it against paying less, or borrowing differently. A shorter term on a cheaper car is usually the strongest move available. If you are weighing this against unsecured borrowing, our comparison of a personal loan and a credit card sets out the trade. Every other tool on the site is in the calculator index, and how we build them is set out in our methodology.