Car affordability calculator
This car affordability calculator works backward from your income to the most expensive car whose payment stays within the share of income you choose.
Rules of thumb for a car budget
The 20/4/10 guideline suggests 20% down, a loan of no more than four years and total car costs, including insurance, under 10% of gross income. Others cap the payment alone at 10% to 15% of take-home pay. The calculator uses a share of gross income you can change.
Remember the costs that sit outside the loan: insurance, fuel, maintenance and registration. A payment that fits the rule can still strain a budget if those are high.
Stretching versus buying within your means
Lengthening the term raises the price you can afford on the same payment, but it adds interest and increases negative-equity risk. Try the same income at 48, 60 and 72 months to see how much extra car the longer term buys and decide if it is worth it.
Car price by income and loan length
With $3,000 down, 7% APR, 6% tax and a payment capped at 10% of gross income, this is the car price each income supports.
| Gross income | 48 months | 60 months | 72 months |
|---|---|---|---|
| $40,000 | $15,400 | $18,200 | $20,800 |
| $60,000 | $22,000 | $26,100 | $30,000 |
| $80,000 | $28,600 | $34,100 | $39,200 |
| $100,000 | $35,100 | $42,000 | $48,400 |
| $130,000 | $45,000 | $53,900 | $62,300 |
Frequently asked questions
What percentage of income should go to a car payment?
Many advisers suggest 10% to 15% of gross monthly income for the payment, and about 15% to 20% including insurance and fuel.
Does this include my other debts?
No. If you already carry a large mortgage or other loans, lower the share to leave room.
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Estimates from standard loan formulas, not a loan offer or financial advice. Example rates are assumptions: use your own quote.