Calculate how much car you can afford based on income, monthly budget, and the 20/4/10 rule. See payment estimates, total cost breakdowns, and affordability ratings.
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Buying a car is one of the biggest financial decisions most people make. Before stepping into a dealership, knowing exactly how much car you can afford helps you negotiate confidently and avoid overspending. This calculator uses six proven budgeting rules — including the popular 20/4/10 rule, the 10% rule, and the 35% price-to-income ratio — to give you a personalized affordability range based on your income, existing debts, credit score, and total ownership costs like insurance, fuel, and maintenance.
A car affordability calculator is a financial planning tool that estimates the maximum vehicle price you can reasonably afford based on your income and budget. Unlike a simple car loan calculator that tells you what your payment will be, an affordability calculator works in reverse — it starts with your financial situation and determines what you should spend. It factors in your gross and take-home income, monthly debt obligations, preferred loan terms, down payment, and total costs of car ownership including insurance, fuel, and maintenance.
Core Formula (Present Value of Annuity)
Max Loan = Payment × [(1 - (1+r)^(-n)) / r]Setting a budget ceiling before you shop prevents emotional decisions at the dealership. Knowing your maximum price keeps you focused on cars within your real financial comfort zone.
Financial experts recommend different approaches — the 20/4/10 rule, the 10% rule, the Edmunds 15% rule, and more. This calculator shows all rules side-by-side so you can choose the strategy that fits your goals.
A car payment is just one piece of the puzzle. Insurance, fuel, and maintenance can add $300-$500 per month. This calculator includes all costs to give you a complete picture of what you can truly afford.
Adding a car payment affects your debt-to-income ratio, which matters for future loans and mortgages. See how a car purchase changes your DTI before you commit.
Walk into any dealership knowing exactly what you can afford. Having a clear budget backed by financial analysis gives you negotiating power and saves time.
If you have never purchased a car before, this calculator helps you understand what price range is realistic for your income level without relying on dealership advice.
Whether you earn $40,000 or $120,000, see exactly how much car each salary level supports using conservative and moderate budgeting rules.
Toggle between new and used to see how the Edmunds rule adjusts recommendations, and compare interest rates typical to each vehicle type.
Adjust down payment percentages to see how saving more upfront changes your maximum affordable price and monthly payment.
The 20/4/10 rule recommends 20% down, a 4-year loan, and payments under 10% of gross income. Use this calculator to see if you meet this popular financial benchmark.
With a $50,000 annual salary (approximately $3,125 monthly take-home), the 10% rule suggests a payment of about $313 per month, which translates to roughly a $16,000–$18,000 car with standard loan terms. The 35% price rule caps your car at $17,500. The Edmunds 15% rule allows up to $469 per month for a new car, supporting a price around $24,000–$26,000. A comfortable range for a $50,000 salary is typically $17,000 to $25,000 depending on your existing debts and down payment.
The 20/4/10 rule is a popular car buying guideline that recommends three things: put at least 20% down on the vehicle, finance for no more than 4 years (48 months), and keep your total monthly car payment at or below 10% of your gross monthly income. For someone earning $60,000 per year ($5,000 per month gross), this means a payment no higher than $500 per month with a 20% down payment on a 4-year loan.
Most financial experts recommend keeping your car payment between 10% and 15% of your monthly take-home pay. The NerdWallet 10% rule is more conservative, while the Edmunds 15% rule allows slightly more spending on new cars. For a household with $4,000 in monthly take-home pay, this means a car payment between $400 and $600. Always consider your total car costs (insurance, fuel, maintenance) when setting your budget.
The widely recommended range is 10% to 20% of your take-home pay for all car-related expenses. The 10% rule covers just the payment, while the 20% total cost rule includes insurance, fuel, and maintenance. If your monthly take-home is $4,000, aim to spend no more than $400–$800 on total car costs. Spending above 20% of take-home on a car is generally considered financially risky.
With a $400 monthly payment, a 60-month loan at 6.5% APR, and a 10% down payment, you can afford approximately a $21,000–$23,000 vehicle. With a larger 20% down payment, the same $400 payment supports a car priced around $24,000–$26,000. Shorter loan terms or higher interest rates will reduce the maximum price, while longer terms increase it but add more total interest.
From a purely financial standpoint, used cars typically offer better value because new cars depreciate 20–30% in the first year. Used cars also have lower insurance costs and sales tax. However, new cars come with factory warranties, the latest safety features, and potentially lower interest rates. The Edmunds rule reflects this by recommending a 15% payment-to-income ratio for new cars but only 10% for used cars.
At $80,000 per year (approximately $5,000 monthly take-home), the 10% rule allows a $500 monthly payment supporting a car around $26,000–$28,000. The 15% Edmunds rule allows $750 per month for a new car, supporting prices around $38,000–$42,000. The 35% price rule caps your car at $28,000, while the more moderate 50% rule allows up to $40,000. A comfortable range for an $80,000 salary is typically $28,000 to $40,000.
Absolutely. Many car buyers only consider the monthly loan payment and overlook insurance ($150–$250/month), fuel ($100–$200/month), and maintenance ($50–$150/month). These can add $300–$600 per month to your car costs. The 20% total cost rule specifically accounts for all these expenses. Use the ownership costs section of this calculator to include your personalized estimates for a complete budget picture.