Car Affordability Calculator
Find how much car you can afford from your income, down payment and loan terms.
About the Car Affordability Calculator
Enter your gross monthly income, the share you'll spend on a car payment, your down payment, the loan rate and term, and sales tax. The calculator gives the car price you can afford and the loan's total interest.
A popular guideline (the 20/4/10 rule) is at least 20% down, a loan of no more than 4 years and total car costs (payment, insurance, fuel) under 10% of gross income. Longer loans lower the payment but raise interest and leave you owing more than the car is worth for longer.
The formula
Loan = payment × (1 − (1 + i)⁻ⁿ) ÷ i; price = (loan + down) ÷ (1 + tax)
Worked example
Income 6,000 a month, 10% for the payment, 5,000 down, 7% over 60 months, 8% sales tax
- Payment: 600 a month supports a 30,301 loan
- Price: (30,301 + 5,000) ÷ 1.08 = 32,686
- Total interest 5,699
Questions people ask
Should I include insurance and fuel?
Yes, in your budget; lenders look only at the payment.
Is 72 or 84 months OK?
It cuts the payment but often means negative equity for years.