What Drives Your Auto Payment

Your monthly auto payment is the amortized installment on the amount financed: price minus down payment and trade-in, plus sales tax and fees. Because sales tax is often charged on the price after trade-in (in most states), the trade-in can shrink both the financed amount and the tax. Lengthening the term lowers the payment but raises total interest — a 72-month loan at the same rate can cost thousands more than 60 months, which is why the total-cost figures here matter more than the monthly number alone.