Car Affordability Calculator
Calculate how much car you can afford based on your budget, income, and financial situation
Calculate Car Affordability
Maximum monthly car payment you can comfortably afford
Cash available for down payment and fees
Estimated trade-in value of your current vehicle
Annual percentage rate for the car loan
Total loan duration (recommend 48 months or less)
State/local sales tax rate on vehicle purchase
Car Affordability Results
Loan Term: 48 months (4 years, 0 months)
Monthly Payment: $0 × 48 payments
Financial Analysis
Example Calculation
Car Purchase Scenario
Monthly Payment Budget: $400/month
Available Cash: $3,000
Trade-in Value: $5,000
Interest Rate: 6.5% APR
Loan Term: 48 months
Sales Tax: 8.5%
Affordability Results
Loan Amount: $17,076 (based on $400/month payment)
Total Available: $25,076 ($3,000 + $5,000 + $17,076)
Maximum Car Value: $23,114 (after 8.5% sales tax)
Total Interest: $2,924 over 48 months
Car Affordability Guidelines
20/4/10 Rule
20% down, 4-year loan max, 10% of income for payment
Total Transportation
Limit total transport costs to 15-20% of income
40% Income Rule
Car value should not exceed 40% of annual income
Additional Car Costs
Understanding Car Affordability
How Much Car Can You Afford?
Determining car affordability involves more than just the monthly payment. You need to consider your total transportation budget, including insurance, fuel, maintenance, and other ongoing costs.
Key Affordability Rules
- •Monthly payment should not exceed 10-15% of gross income
- •Total transportation costs should stay under 20% of income
- •Car value should not exceed 40% of annual income
- •Consider a down payment of at least 20%
Calculation Method
Maximum Car Value =
(Available Money + Trade-in + Loan Amount) ÷ (1 + Sales Tax Rate)
Loan Amount =
Monthly Payment × [(1 - (1 + r)^-n) ÷ r]
Where r = monthly interest rate, n = number of months
Remember: This calculator shows the maximum you can afford. Consider buying below this limit to maintain financial flexibility.