How Much Car Can I Afford?

Start with your income. The calculator sets aside money for insurance, gas and upkeep, then finds the most expensive car the rest can pay for, including your state's sales tax.

Yearly income (before tax)

Your gross pay for the year. Include a partner's income if you share the car payment.

Share of income for car costs

10% is the classic guideline for everything the car costs you each month. Go higher only if your other costs are low.

Insurance, gas and upkeep per month

These come out of the budget before the loan payment. Get an insurance quote for the car you're considering.

Loan term

Interest rate (APR)

Get pre-approved by a bank or credit union to know your real rate.

Down payment

Trade-in value

Still owed on trade-in

State

Sales tax

Picking a state fills in its rate and applies its trade-in rules. Add your local rate on top.

Title, registration & dealer fees

Roll taxes and fees into the loan

You can afford a car priced around

$18,049

with a 48-month loan at 6.5% APR

Monthly payment: $375.00
Amount financed: $15,813
Car budget per month: $625
Other car costs: $250
Sales tax: $1,263
Total interest: $2,187

20/4/10 check 3 of 3

20% downYour down payment and trade-in equity cover 28% of the price.
4-year loan or shorterYour loan is 48 months.
Car costs under 10% of incomePayment plus other car costs come to 10.0% of your gross income.

How the loan term changes what you can afford

Same monthly budget. Longer loans buy more car but cost more in interest.

Term	Car price	Interest	Total cost
36 mo (3 yr)	$14,706	$1,265	$18,500
48 mo (4 yr)	$18,049	$2,187	$23,000
60 mo (5 yr)	$21,183	$3,334	$27,500
72 mo (6 yr)	$24,120	$4,692	$32,000
84 mo (7 yr)	$26,872	$6,247	$36,500

How this calculator works

Monthly car budget = yearly income ÷ 12 × the share you choose.
Payment budget = car budget − insurance, gas and upkeep.
Car price = the highest price whose monthly payment fits the payment budget, after your down payment, trade-in, sales tax and fees.

Pick your state and the calculator applies its tax rules. For example, in some states a trade-in lowers the sales tax and in others it doesn't, which changes how much car the same budget buys.

The 20/4/10 rule

A common guideline for buying a car without straining your budget:

20% down, so you don't owe more than the car is worth as soon as you drive off.
4 years or less on the loan, to limit interest and how long you're making payments.
10% of gross income or less for all car costs, including insurance and fuel.

The check next to your results shows which parts your scenario meets. It's a guideline, not a rule. A lender may approve you for much more, but what a lender will approve and what fits your budget comfortably are different numbers.

Choosing your budget share

10% is the conservative choice and leaves room for savings and surprises. 15% can work if you have no other debt and low housing costs. At 20%, the car is taking a large slice of your income, so look hard at a cheaper car or a bigger down payment first.

Next steps

Get a rate quote from a bank or credit union before you shop, so the APR here is real.
Price the specific car in the auto loan calculator, with your state's rules filled in.
Already have a loan? See if a lower rate would help with the refinance calculator.