Car Affordability Calculator
Find out how much car you can afford based on your income and expenses. This calculator includes all ownership costs—payment, insurance, gas, and maintenance—to give you the complete picture.
Your Financial Situation
Purchase Details
Ownership Costs
You Can Afford
Monthly Ownership Costs Breakdown
20/4/10 Rule Check
Car Price Comparison
| Car Price | Payment | Total Monthly | % of Income | Status |
|---|---|---|---|---|
| $15,000 | $200 | $567 | 9.5% | ✓ Affordable |
| $20,000 | $301 | $667 | 11.1% | ✓ Affordable |
| $25,000 | $401 | $767 | 12.8% | ✓ Affordable |
| $30,000 | $501 | $868 | 14.5% | ✓ Affordable |
| $35,000 | $601 | $968 | 16.1% | ⚠ Stretch |
| $40,000 | $701 | $1,068 | 17.8% | ⚠ Stretch |
| $50,000 | $902 | $1,268 | 21.1% | ✗ Too High |
Loan Term Comparison (for $31,616 car)
| Term | Monthly Payment | Total Interest | Total Paid |
|---|---|---|---|
| 36 months | $828 | $3,189 | $29,805 |
| 48 months | $644 | $4,274 | $30,890 |
| 60 months | $533 | $5,384 | $32,000 |
| 72 months | $460 | $6,518 | $33,134 |
| 84 months | $408 | $7,677 | $34,293 |
Car Buying Guidelines
The 20/4/10 Rule
Put 20% down, finance for no more than 4 years, and keep total car costs (payment + insurance + gas + maintenance) under 10% of gross income.
New vs Used
New cars lose 20-30% of value in the first year. A 2-3 year old certified pre-owned car often offers the best value—someone else absorbed the depreciation.
Total Cost of Ownership
Don't just look at the sticker price. Insurance, gas, maintenance, and depreciation can add $500+/month to ownership costs. Factor these in before buying.
Frequently Asked Questions
How much car can I afford?
A common guideline is to spend no more than 10-15% of your monthly income on total car costs (payment + insurance + gas + maintenance).
| Monthly Income | Max Total Car Cost | Approx. Car Price* |
|---|---|---|
| $4,000 | $400-600 | $15,000-20,000 |
| $6,000 | $600-900 | $20,000-30,000 |
| $8,000 | $800-1,200 | $30,000-40,000 |
| $10,000 | $1,000-1,500 | $40,000-50,000 |
*Assumes 20% down, 5-year loan, 7% rate, $300/mo ownership costs
What is the 20/4/10 rule?
- 20%: Put at least 20% down
- 4: Finance for no more than 4 years
- 10%: Keep total car costs under 10% of gross income
This conservative rule helps ensure you don't overextend on a depreciating asset.
Should I buy new or used?
Used cars typically offer better value. New cars lose 20-30% of their value in the first year alone. A 2-3 year old certified pre-owned vehicle lets someone else absorb the steepest depreciation while still offering reliability and often a manufacturer warranty.
What loan term should I choose?
Shorter is better. While longer terms lower monthly payments, they:
- Result in paying more total interest
- Risk being "underwater" (owing more than the car is worth)
- Often come with higher interest rates
Aim for 48 months or less. Never finance longer than 60 months.