Car loan calculator
Work out your real monthly payment with sales tax and trade-in included — plus the two numbers dealerships never lead with: total interest, and how long you'd owe more than the car is worth.
Most provinces only tax the price after your trade-in.
At this term you'd owe more than the car is worth for roughly the first 16 months. Selling or writing off the vehicle during that window means paying the difference out of pocket — the main risk of long car loans and small down payments.
Depreciation modelled at roughly 20% in the first year and 15% a year after. Sales tax is calculated on the price after trade-in, which is how most provinces treat it — Quebec and private sales have their own rules. Excludes freight, PDI, dealer fees and insurance.
Amount financed = price + sales tax − down payment − trade-in. A longer term lowers the payment but raises total interest and keeps you underwater longer, because cars lose roughly 20% of their value in year one.
Why the monthly payment misleads
Dealerships negotiate in monthly payments because almost any price fits almost any budget if you stretch the term far enough. Stretching a loan from 60 to 84 months might drop the payment by $150 while adding thousands in interest — and leaving you with negative equity for years. Always compare the total cost and the interest paid, not the monthly number.
Frequently asked questions
How is a car loan payment calculated?
The amount financed is the vehicle price plus sales tax, minus your down payment and trade-in. That's amortized over the loan term at your interest rate using the standard loan formula, giving a fixed monthly payment where early payments are mostly interest.
Do I pay sales tax on a car after a trade-in?
In most provinces, yes — you're taxed on the price after the trade-in is deducted, which is a real saving. If you trade in a $10,000 car in Ontario, you save 13% of that, about $1,300. Quebec and private sales follow different rules.
Is an 84-month car loan a bad idea?
Usually. Longer terms lower the monthly payment but sharply increase total interest, and they keep you underwater — owing more than the car is worth — for years. If you sell or write off the vehicle during that window, you pay the shortfall out of pocket.
How much should I put down on a car?
Around 20% is the common guideline, mainly because it shortens the period where you owe more than the car is worth. New vehicles lose roughly 20% of their value in the first year, so a small down payment on a long term almost guarantees negative equity.
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Researching and writing about Canadian personal finance since 2026.
Last reviewed August 2026 · How we research
“Car Loan Calculator (Canada) — VaultNerd” — VaultNerd, https://www.vaultnerd.com/tools/auto-loan-calculator, updated August 2026.
- Standard loan amortization formula
- Provincial sales tax treatment of vehicle trade-ins