Car Affordability Calculator
Start from what you can comfortably pay each month — or your take-home income — and work backward to a realistic car price, taxes and fees included.
Working backward from payment to price
Car price = (Loan + Down payment) ÷ (1 + tax & fee rate)
Take-home $4,500/mo → 10% guideline = $450/mo payment budget
At 7% for 60 months, $450/mo supports a loan of ≈ $22,700. Add $5,000 down, divide by 1.08 (tax + fees) → car price ≈ $25,700.
The full cost of ownership
The loan payment is roughly half the real monthly cost of a car. Insurance ($100–$250), fuel ($100–$250 — estimate yours with the fuel cost calculator), and maintenance/depreciation reserves ($50–$150) stack on top. That's why the 20% total-transportation guideline exists. If the number this calculator gives you feels low compared to what dealers approve — that's the point. Financing more is always available; affording it is the constraint. Check the resulting loan against the auto loan calculator with a real quote, and don't skip the DTI check if a mortgage application is in your future.
Frequently asked questions
How much car can I afford on my salary?
Payment ≈ 10% of take-home, total car costs under 20%. $4,500 take-home → ~$450 payment → ~$26,000 car with $5,000 down.
What is the 20/4/10 rule?
20% down, max 4-year loan, transportation under 10% of gross income — conservative by design because cars depreciate.
Should I include insurance in my car budget?
Yes — insurance, fuel, and maintenance typically add $250–$500/mo beyond the payment.
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Note: Guideline-based estimate; insurance and fuel costs vary widely by driver and region. Not financial advice. Last reviewed: July 2026.