How this calculator works
Your monthly budget is converted into the largest loan it can repay at your APR and term. Adding your cash down and trade-in equity, then removing sales tax and fees, gives the vehicle price you can afford.
Worked example
With the example values below: Car price you can afford, $30,000 (with a $27,448 loan). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Monthly payment budget | $550 |
| Cash down | $5,000 |
| Trade-in equity | $0 |
| APR | 7.5% |
| Term | 60 months |
| Sales tax & fees | 8% |
How much car can you afford?
Start from the monthly payment you're comfortable with, not the price. The calculator converts that payment into the largest loan it can repay at your APR and term, adds your cash down and trade-in equity, and takes out sales tax and fees to show the price you can shop for.
A common guideline keeps the car payment under about 10% to 15% of take-home pay, and total car costs, including insurance, fuel and maintenance, under about 20%. If you earn $5,000 a month after tax, that's a payment of about $500 to $750.
The 20/4/10 rule
It's conservative, and higher car prices make it hard to meet. Use it as a target: the closer you get, the less a car strains your budget.
- 20% down, so you don't start out owing more than the car is worth.
- 4-year (48-month) maximum loan term.
- 10% of gross monthly income as the cap on total car costs: payment, insurance and fuel.
Costs beyond the payment
Insurance can cost more than you expect, especially for younger drivers or luxury and sports models, so get a quote before buying. Fuel, maintenance, registration and parking add up too. Electric cars usually cost less to fuel and maintain but more to insure. The car ownership cost calculator adds all of these to the price.
New vs. used
New cars typically lose about 20% of their value in the first year and around half within five years. A two- to three-year-old used car lets the first owner absorb that drop, but used-car loans usually carry higher rates. Certified pre-owned cars split the difference with an extended warranty. Once you've picked a price, the auto loan calculator shows the full payment schedule.
Frequently asked questions
How much car can I afford on my salary?
Under the 20/4/10 rule, total car costs should stay under 10% of gross income. On $60,000 a year, that's about $500 a month for payment, insurance and fuel combined. A looser guideline caps the payment alone at 10% to 15% of take-home pay.
How much car can I afford with a $500 payment?
At 7% APR over 60 months, $500 a month supports a loan of about $25,250. Add your down payment and trade-in, then subtract tax and fees, to get the vehicle price.
What is the 20/4/10 rule for buying a car?
Put at least 20% down, finance for no more than four years, and keep total monthly car costs, including insurance and fuel, under 10% of gross income.
Should I include insurance when deciding what car I can afford?
Yes. Insurance varies widely by model, age, location and driving record. Get quotes on the specific cars you're considering before you buy.
Is it better to buy a new or used car?
Used cars usually cost less overall because new cars lose about 20% of their value in the first year. New cars come with full warranties, the latest safety features and often lower promotional rates. Compare total cost over the years you'll keep the car.
Grow what this calculator projects.
TruthSayer AI sends quantitative stock signals across valuations, earnings and dark-pool activity, each one traded in its own funded account first.
Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.