Car Affordability Calculator
Calculate how much car you can afford
About the Calculator
Buying a car is emotional and fast, but the payment is only part of the story. This calculator uses the 20/4/10 guideline to turn income, debts, down payment, term, and rate into a realistic price range. It also adds insurance, fuel, and maintenance so you see the true monthly cost. Use it before you shop to set a ceiling that protects your cash flow, not just your credit score. If you want a reliable car without feeling squeezed at the end of the month, this gives you a clear, honest starting point. Change the down payment or term to see how much flexibility you really have.
Before taxes
Credit cards, loans, etc.
Recommended: 48 or less
Maximum Affordable Car Price
$26,084
Monthly Payment: $500
Down Payment Rule
⚠ Under 20%
Need: $5217
Loan Term Rule
✓ 4 Years
Current: 48 months
Income Rule
✓ 10% Income
DTI: 20.0%
Total Cost of Ownership (Monthly)
15.9% of gross income
Total Loan Payments
$24,000
Interest: $2916
Est. Value After 48mo
$9,129
~35% of original
The Formula
How to Calculate Manually
- 1
Enter your gross monthly income (before taxes)
- 2
Add any existing monthly debt payments (credit cards, student loans, etc.)
- 3
Specify your available down payment amount
- 4
Set the loan term (recommended: 48 months or less)
- 5
Enter the expected interest rate for auto loans
Examples
$5,000/month income, $500 max payment, 20% down, 48 months at 6%
A rough target is a car around the mid-$20k range, assuming the 20/4/10 rule.
$75,000 annual income ($6,250/month), no other debts
A 10% payment cap suggests about $625/month, which typically supports a low-$30k car with a 4-year loan.
$100,000 annual income ($8,333/month) with $700 in monthly debts
The recommended payment will be lower due to debt load, reducing the affordable car price.
💡 Tips
- •The 20/4/10 rule: 20% down payment, 4-year (48-month) loan maximum, 10% of gross income or less
- •Total car expenses (payment + insurance + gas + maintenance) should not exceed 15-20% of income
- •Consider total cost of ownership: insurance can add $100-300/month, maintenance $50-100/month, fuel $150-300/month
- •New cars depreciate 20-30% in the first year - consider certified pre-owned to save money
- •Factor in property tax, registration fees, and higher insurance costs for newer/luxury vehicles
🎉 Fun Facts
- •Average new car price in the US is over $48,000 as of 2024
- •Cars depreciate about 60% in the first 5 years of ownership
- •The average American spends 18% of their income on transportation
- •A car sitting idle depreciates about $40-50 per day just from time passing