Car Affordability Calculator
Turn a monthly payment budget into the car price you can finance, given your rate, term and down payment.
How it works
Max loan = payment × (1 − (1 + r)^−n) ÷ r · Max price = max loan + down payment
This runs the loan formula backwards: instead of finding the payment from a price, it finds the largest loan a fixed payment can support. r is the monthly rate (annual ÷ 12 ÷ 100) and n is the term in months; the down payment is added on top since it is not financed. It ignores tax, title and fees, which eat into the price you can actually drive away with.
Worked example
A $400 monthly budget at 7.5% over 60 months supports a loan of about $19,962. Add a $3,000 down payment and you can afford roughly a $22,962 car, paying about $4,038 in interest over the term.
Frequently asked questions
How much of my income should go to a car payment?
A widely used rule keeps the payment at 10–15% of monthly take-home pay, and total car costs (payment, insurance, fuel, upkeep) under about 20%. Payment alone is only part of the picture.
Does a longer term let me afford more car?
It raises the price a given payment supports, but you pay far more interest and stay underwater — owing more than the car is worth — for longer. 60 months or less is the usual guidance.
Why doesn’t this include tax and fees?
Sales tax, title and dealer fees vary by state and dealer and are added on top of the price. Budget a few thousand extra, or use the auto loan calculator to fold tax into the payment.
Related calculators
Educational estimate, not financial advice — dealer terms, fees and taxes vary.