A $32,000 vehicle with 7.25% sales tax, $4,000 down, and 7.9% APR for 60 months finances $30,320 and costs $613.33 a month. An auto loan payment starts from the amount financed — the vehicle price with sales tax added, minus the down payment and any trade-in credit — which is then amortized at the APR over the chosen term.
Your 7.9% is above the average 60-month new-car loan rate of 7.52%. Federal Reserve G.19, as of Q1 2026.
Suppose you put the default values into Auto Loan Calculator:
Plug those into the formula P = (price · (1 + tax)) − down − trade; M = P · r / (1 − (1+r)^−n) and the result is:
At the defaults, sales tax raises the $32,000 price to $34,320. Subtracting the $4,000 down payment (no trade-in) leaves $30,320 to finance. At 7.9% APR the monthly rate is about 0.658%, and over 60 payments the formula gives $613.33 per month. Total interest comes to about $6,480, and the all-in cost of the car — payments plus down payment — is roughly $40,800.
| Loan term | Monthly payment | Total interest |
|---|---|---|
| 36 mo | $948.72 | $3,834 |
| 48 mo | $738.78 | $5,141 |
| 60 mo | $613.33 | $6,480 |
| 72 mo | $530.13 | $7,849 |
| 84 mo | $471.06 | $9,249 |
The calculation happens in two stages, following the approach used by industry pricing tools such as Edmunds. First the amount financed is assembled: vehicle price × (1 + tax rate), minus down payment, minus trade-in value. Then the standard amortization formula converts that principal into a level monthly payment at the APR divided by 12, over the number of months in the term. Total interest is the payment times the term minus the amount financed; total cost adds back the down payment and trade-in so it reflects everything the vehicle costs. Dealer fees, registration, extended warranties, and gap insurance are deliberately left out — they vary too much by dealer and state to model honestly.
References: Edmunds methodology.
Last reviewed July 2, 2026 · Editorial policy