# Car Loan Payment Calculator with Sales Tax

> Work out a car loan payment with sales tax, down payment and trade-in in any province, monthly or bi-weekly, and see the total interest

What does a $35,000 car really cost in Ontario? Add 13% HST and the price becomes $39,550. Put $3,000 down, borrow at 7.49% for six years, and each month costs you $631.78. Enter your own price, province, down payment and trade-in below, and you'll see yours.

## How does the calculator get to a payment?

It starts with the price you enter and adds the sales tax for your province. Your down payment and trade-in come off that total, and what's left is the amount you borrow. Payments stay level for the whole term, and interest is charged at your rate once per payment. You can pick monthly payments, or bi-weekly ones at 26 a year.

## How much does the term change the payment?

It's a big lever. The table uses the default car above, a $36,550 loan at 7.49% after tax and a $3,000 down payment, and only the term changes.

| Term | Monthly payment | Total interest |
| --- | --- | --- |
| 2 years | $1,644.57 | $2,919.65 |
| 3 years | $1,136.76 | $4,373.52 |
| 4 years | $883.57 | $5,861.28 |
| 5 years | $732.21 | $7,382.80 |
| 6 years | $631.78 | $8,937.92 |
| 7 years | $560.43 | $10,526.42 |
| 8 years | $507.27 | $12,148.08 |

## What does the $35,000 car cost in total?

Take that car in Ontario with no trade-in. HST is $4,550, so the price with tax is $39,550, and after the $3,000 down payment you borrow $36,550. Over six years you pay $631.78 a month. That adds up to $45,487.92, and $8,937.92 of it is interest.

Add a $5,000 trade-in and the loan drops to $31,550. The payment falls to $545.35, and total interest to $7,715.22. Buy the same car in Alberta and you pay only $1,750 of GST, which makes the price with tax $36,750. The loan is then $33,750, and the six-year payment is $583.38.

## Is a longer loan a good idea?

Usually not.

Buyers often compare cars by the monthly payment alone, and it's an easy trap to fall into when the dealer asks what you'd like to pay each month. Stretch the term from four years to eight and the payment drops from $883.57 to $507.27, but the interest more than doubles. Ask what the loan costs in total. The monthly figure is only a slice of it.

There's a second catch. A car loses value the moment you drive it off the lot, and a long loan with a small down payment pays down slowly. For a few years you can owe more than the car is worth, which hurts if it's written off or you want to sell. A bigger down payment or a shorter term keeps you out of that hole.

The result leaves out dealer fees, insurance and registration, so budget for those on their own. It also adds tax to the full price and takes off the trade-in afterwards. If your deal treats tax on a trade-in differently, ask the dealer for the exact figure, since that's a number we can't see. And use the rate written in your loan offer, since a rate in an advertisement may need a strong credit score.

## How can you lower the cost?

Put more down. That's the surest way to cut interest, because you borrow less. Add $5,000 to the down payment or trade-in and the default payment goes from $631.78 to $545.35. Shopping for a lower rate helps as well, and the rate field lets you test each offer.

How much? Keep the same $36,550 and six years, but get 5.99% instead of 7.49%. The payment becomes $605.57, about $26 a month less, and total interest falls to $7,050.79. That's $1,887.13 saved just by asking a second lender, which beats most coupons.

## What should you ask before you sign?

- What's the annual rate, and is it fixed for the whole term?

- Are there fees on top, such as a documentation or admin charge?

- Can you pay extra or pay it off early without a penalty?

- What's the total you'll pay by the last payment?

Get those answers in writing, then plug the numbers in above to see if the monthly figure matches.

## Our sources

Sales tax uses the current combined rate for each province, such as 13% HST in Ontario and 5% GST in Alberta. The payment follows the standard level-payment loan formula, with the rate divided across the payments in a year. Lenders round in their own ways, so don't be surprised if your contract lands a few cents away. This website has no connection with a lender, the CRA or any government body.

A payment only helps if it fits your month, so test it in the [monthly budget calculator](https://tax-services.ca/calculators/savings-budget/budget-calculator). If you'd rather not pledge a vehicle, price a [personal loan](https://tax-services.ca/calculators/loans-debt/personal-loan-calculator) instead. The [interest calculator](https://tax-services.ca/calculators/savings-budget/interest-calculator) shows what a rate does to any sum over time, and the [HST and GST calculator](https://tax-services.ca/calculators/sales-tax/gst-hst-calculator) shows the tax alone on any price.

---
Source: https://tax-services.ca/calculators/loans-debt/car-loan-calculator
Last updated: 2026-10-09
Independent information site. Not affiliated with the CRA. No services, no guarantee of accuracy. See https://tax-services.ca/disclaimer