Does this include taxes and fees?
No. You should leave roughly 10% of your budget buffer for taxes, title, and registration fees depending on your state.
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Car Affordability Calculator
Find out how much car you can afford based on your desired monthly payment and loan terms.
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How we calculate affordability
We reverse-calculate the standard auto loan amortization formula. We take your maximum monthly budget and find out the largest loan principal that payment can support at your interest rate.
We then add your down payment and trade-in value on top of that loan limit to find your total affordable car price.
Financial advisors frequently recommend the 20/4/10 rule: put down at least 20%, finance for no more than 4 years (48 months), and keep total vehicle costs below 10% of gross monthly income.
P = M [ (1 + r)^n - 1 ] / [ r(1 + r)^n ] P = Max Loan, M = Monthly Budget, r = Monthly Interest Rate, n = Number of Months
Frequently asked questions
How much of my income should go to a car?
A common rule of thumb is that all car expenses (payment, insurance, gas) should not exceed 15-20% of your take-home pay.
How does loan term affect affordability?
A longer loan term lowers monthly payments and makes a more expensive vehicle seem affordable, but significantly increases total interest paid over time.