Loans

Car Affordability Calculator

How much car your income can handle, using the 15% rule.

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How this calculator works

Dealerships will happily sell you more car than your budget can carry, stretching the term until the payment "fits." This car affordability calculator works backward from a sane budget instead: it caps your monthly car payment at 15% of take-home pay (the widely used affordability guideline), then converts that payment into the maximum vehicle price your down payment, trade-in, rate and term can support. The result is the most expensive car you should buy, not the most expensive loan you can get.

The 15% covers the payment only, remember insurance, fuel and maintenance sit on top, which is why many advisors push for 10% all-in. The down payment does heavy lifting: 20% down keeps you from going underwater (owing more than the car is worth) as it depreciates. And watch the term trap the calculator exposes: a 72- or 84-month loan raises the "affordable" price but piles on interest and years of negative equity. Shop with your max price in hand, negotiate the out-the-door price first, and let the financing be a separate conversation.

Frequently asked questions

How much car can I afford?
Keep the monthly payment under 15% of take-home pay (10% is even safer once you add insurance and fuel). Put at least 20% down and keep the term at 48–60 months max.
What is the 20/4/10 rule?
Put 20% down, finance for no more than 4 years, and keep total car expenses under 10% of gross income. It is the strictest popular guideline.
Should I include insurance in the 15%?
The 15% rule covers the loan payment. Budget insurance, fuel and maintenance separately, together they often add another 5–10% of income.
Is a longer loan term okay if the payment fits?
Rarely. 72–84 month loans mean years of owing more than the car is worth plus thousands in extra interest. If you need 84 months to afford it, the car is too expensive.
Disclaimer: Results are estimates for planning purposes only and are not financial advice. Actual loan terms, taxes and investment returns vary. Consult a qualified professional before making financial decisions.