Auto Trade-In Calculator: What Trading Up Really Costs

You still owe on your car, and you want a newer one. Enter what you owe, what you pay and what the dealer offers for it, and this works out what the trade-in really leaves you, what the new payment comes to with tax and fees at today's rate, and how much car you could buy without the payment running away from you.

Trading in costs you, every month+$313/moYour payment goes from $633 at 6.90% to $946 at 8.50%. Your trade-in is worth $1,500 more than you owe, and that goes toward the new car, leaving a $46,110 loan.

The car you’re buying

Price

Sales Tax

Dealer and Registration Fees

Cash Down

Interest Rate

Loan Term

yrs

Tax only what’s left after the trade-in

Sales tax of 7% on the $23,000 left after the trade-in comes to $1,610. Most states tax only that, but a few, California among them, tax the full price, and some count only part of the trade-in. Check your state’s rule, and untick the box if it taxes the full price.

The fees are the dealer’s documentation fee, title and registration. They vary by state and by dealer, so use the ones on the dealer’s buyer’s order.

You are giving up a 6.90% loan for one at 8.50% — 1.60 points more expensive, on a balance 2.2× the size.

What can you actually buy?

Working the same numbers backwards: with your trade-in and a 8.50%, 5-year loan, here is the most car each monthly payment buys, tax and fees included.

If your payment is	Monthly	Change	Loan	Max price
Exactly what you pay now	$633	+$0	$30,853	$30,741
25% more	$791	+$158	$38,566	$37,950
50% more	$950	+$317	$46,280	$45,159
100% more	$1,266	+$633	$61,706	$59,576

Keeping your payment where it is caps the new car at $30,741, which is $14,259 less than the one you are pricing.

Why trading in costs more than the price difference

The gap between the trade-in offer and the new car’s price is the number the showroom talks about, and it is not the whole cost. Sales tax and fees come on top, and they are usually borrowed too. The rate resets to what lenders charge today. And the clock restarts: the loan you were a few years from clearing gives way to a new one with its whole term ahead of it, which is why the interest on this page grows faster than the price. If you owe more than the car is worth, the shortfall does not stay at the dealer. It moves onto the new loan, where you pay interest on a car you no longer drive, and you start out owing more than the new one is worth, which makes the next trade-in harder still.

Where to go from here

The auto loan calculator takes the new loan from here: what it costs in all, and what paying it off early saves. If you are weighing extra payments against investing the money instead, borrow vs invest works that out for a car loan too.

What this page assumes

Figures are estimates for planning, not a loan offer. Both rates are fixed for the full term. The trade-in counts against sales tax in full or not at all, so a state that counts only part of it falls between the two. The fees are one figure, untaxed, and rebates, dealer add-ons, GAP cover and extended warranties are left out, as are insurance and the cost of running either car. Lenders limit how much they lend against a car’s value, so a large shortfall may not all fit on the new loan. Confirm anything consequential with your lender and the dealer.

Price	$45,000
Sales tax	$1,610
Fees	$1,000
Trade-in offer	−$22,000
Your loan, paid off	$20,500
Cash down	$0
New loan	$46,110

Payment now (6.90%)	$633
Payment after (8.50%)	$946
Monthly difference	+$313
Interest left if you keep it	$2,250
Interest on the new loan	$10,651
Lifetime difference	+$8,401