How car loan payments are calculated
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A fully amortizing car loan payment is the amount that pays the interest due each month and reduces the balance so it reaches zero at the end of the term. If the annual rate is compounded monthly, the monthly rate is the annual rate divided by 12. A zero rate means the payment is the amount financed divided by the number of months, aside from rounding.
The amount financed is not always the sticker price. A down payment lowers it. A trade-in lowers the price the dealer is financing. Sales tax may be added before you finance. The car loan calculator taxes the price after the trade-in allowance and then subtracts the down payment. Some provinces tax a private sale, or a trade-in, on a different base. Confirm that with the dealer and the province.
What the payment does not include
A contract can add fees, insurance, or a balloon amount. A lease is a different product. The interest rate in an advertisement is not the rate in this tool unless you type that rate in. Rounding can move the final payment by a few cents.
Methodology
The payment formula is the standard closed-form monthly payment. Sales-tax rates are the 2026 GST/HST/PST rates from the CRA table linked above. No lender rate is embedded in the page.