EN

Car Affordability Calculator

Find the car price that fits your budget from your income, down payment, trade-in, loan rate and sales tax.

  • Reviewed October 2026
  • Formula and worked example below
  • Free, no sign-up, runs in your browser
$
% of income
The 20/4/10 rule suggests total car costs under 10% of gross income.
$
$
%
%
Enter your numbers to see the result.

How much car can I afford?

A common guideline is the 20/4/10 rule: put at least 20% down, finance for no more than 4 years, and keep total car costs (payment, insurance and fuel) under 10% of your gross income. Many buyers stretch to 60 or 72 months today, but longer loans cost more interest and leave you owing more than the car is worth for longer.

Loan you can afford = Payment × (1 − (1 + r)^−n) ÷ r Car price = (Loan + Down payment + Trade-in) ÷ (1 + Sales tax)

With a $60,000 income, a payment of 10% of income is $500 a month. At 7% for 60 months that supports a loan of about $25,251. Add a $4,000 down payment and allow for 6% sales tax, and the car price you can afford is about $27,595.

Costs beyond the payment

  • Insurance: often $100–$250 a month, higher for young drivers and new cars.
  • Fuel and maintenance: budget $150–$300 a month for a typical commuter.
  • Registration and fees: dealer documentation fees and title costs vary by state.

If those costs are large for you, lower the payment percentage above so the total stays near 10%–15% of your income.

New vs. used

New cars lose roughly 20% of their value in the first year. A two- to three-year-old used car often gives the best value, though used-car loan rates are usually a little higher. Compare offers with the auto loan calculator.

Frequently asked questions

How much car can I afford on a $60,000 salary?

Keeping the payment at 10% of income ($500 a month), with $4,000 down at 7% for 60 months, you can afford a car of about $27,600 including sales tax.

What is the 20/4/10 rule for buying a car?

Put 20% down, finance for no more than 4 years, and keep total monthly car costs under 10% of gross income.

Is a 72-month car loan a bad idea?

It lowers the payment but costs more interest and increases the risk of owing more than the car is worth. Choose the shortest term you can comfortably afford.

Add this calculator to your website

Free to use on blogs, school sites and company intranets. Copy this code into your page:

Last reviewed October 2026. Results are estimates; check important decisions with a qualified professional.