Car Affordability Calculator
How much car you can buy on a monthly budget
Shop by budget, not sticker price. Enter the monthly payment you're comfortable with to see the maximum car price and loan amount that fits — including the tax, title and fees that get added at the dealer. Below: a budget chart, what each extra year of term really costs you, and the ownership costs that sit outside the payment entirely.
Working backwards from a payment
Most people shop the other way round: they find a car, then work out the payment. That is how you end up stretched. This calculator inverts it — you set the payment you can live with, and it tells you the price that fits.
The important refinement is tax, title and fees. Those are charged on top of the sticker price, so the car you can shop for is lower than your total financing. At $450 a month over 60 months at 7% with $5,000 down, you can finance $27,726 out the door — but at 8% tax and fees that is a $25,672 sticker price, with $2,054 going to the state and the dealer. Shopping at $27,726 would put you two grand over budget before you negotiated anything.
What each monthly budget buys
As a car budget calculator this is the core table: it answers "what car can i afford calculator" style questions directly, and works as a car payment budget calculator in reverse if you already know the price you want.
At 7% APR over 60 months with $5,000 down and 8% for tax and fees:
| Monthly budget | Loan amount | Max sticker price | Total interest |
|---|---|---|---|
| $250 | $12,625 | $16,320 | $2,375 |
| $300 | $15,151 | $18,658 | $2,849 |
| $350 | $17,676 | $20,996 | $3,324 |
| $400 | $20,201 | $23,334 | $3,799 |
| $450 | $22,726 | $25,672 | $4,274 |
| $500 | $25,251 | $28,010 | $4,749 |
| $600 | $30,301 | $32,686 | $5,699 |
| $750 | $37,876 | $39,700 | $7,124 |
Every extra $50 a month buys roughly $2,340 more car at these terms. That is a useful conversion to hold in your head on the forecourt, because it tells you what a $2,000 upsell actually costs per month.
The 20/4/10 rule
The most widely cited buying guideline, and it is deliberately conservative:
- 20% down. Enough equity that you are not underwater the moment you drive away.
- 4 years maximum on the loan.
- 10% of gross income covering all transportation costs, not just the payment.
Very few buyers meet all three, and the rule is more useful as a direction than a test. If you fail on all three at once — small deposit, long term, high share of income — that is the signal to look at a cheaper car rather than a longer loan.
Why a longer term is a worse deal than it looks
Stretching the term is the standard way to fit a bigger car into the same payment. It works, and it costs you:
| Term | Max sticker price | Total interest | Total you pay |
|---|---|---|---|
| 36 months | $18,124 | $1,626 | $21,200 |
| 48 months | $22,030 | $2,808 | $26,600 |
| 60 months | $25,672 | $4,274 | $32,000 |
| 72 months | $29,069 | $6,006 | $37,400 |
| 84 months | $32,237 | $7,984 | $42,800 |
Going from 48 to 84 months buys $10,207 more car and costs $5,176 in extra interest — you pay half again on top of the upgrade. Worse, a car depreciates faster than an 84-month loan amortises, so you spend years underwater: owing more than the car is worth, unable to sell it without writing a cheque, and exposed if it is written off. That gap is what gap insurance exists to cover, and it is a cost the payment figure never shows.
Interest rate matters more than you would guess
Auto loan affordability moves further on the rate than most buyers expect.
| APR | Max sticker price | Total interest |
|---|---|---|
| 0% (manufacturer offer) | $29,630 | $0 |
| 3% | $27,818 | $1,956 |
| 5% | $26,709 | $3,154 |
| 7% | $25,672 | $4,274 |
| 9% | $24,702 | $5,322 |
| 12% | $23,361 | $6,770 |
The spread between a 3% and a 12% rate on the same payment is $4,457 of car. Getting pre-approved by your own bank or credit union before you walk in gives you a rate to beat and removes the dealer's ability to negotiate on the payment rather than the price. If they will only discuss monthly figures, that is the tell.
The costs that sit outside the payment
The loan is rarely the whole burden. Annual running costs for an average car commonly land in these ranges:
| Cost | Per year | Per month |
|---|---|---|
| Insurance | $1,200 to $2,400 | $100 to $200 |
| Fuel (12,000 mi at 25 mpg) | $1,400 to $1,900 | $115 to $160 |
| Maintenance and tyres | $500 to $1,200 | $40 to $100 |
| Registration and inspection | $50 to $500 | $4 to $42 |
| Total beyond the payment | $3,150 to $6,000 | $260 to $500 |
On a $450 payment those add 60 to 110% again. This is why the guidance is to keep all transportation costs under 15 to 20% of take-home pay rather than just the payment, and why a cheaper car with good economy and low insurance can fit a budget that a slightly pricier one blows. Price the fuel side with the fuel cost calculator before committing.
Mistakes that cost the most money
- Negotiating the payment instead of the price. A dealer can hit any payment by lengthening the term.
- Forgetting tax, title and fees, which add 6 to 12% to the sticker in most states.
- Rolling negative equity forward from an old loan into a new one. It compounds.
- Taking an 84-month loan for a car you will not keep seven years.
- Skipping pre-approval and accepting dealer financing without a rate to compare it against.
- Budgeting the payment only and being surprised by insurance on a car you already bought. Get a quote first.
Estimate only — not financial advice. Rates, taxes and fees vary by lender and state.
How this car affordability calculator works out its numbers
The loan amount is the present value of your monthly payment over the term at the given APR, using the standard annuity formula. Adding the down payment gives what you can finance out the door.
- Tax and fees divide, they do not subtract. Because they are charged on the sticker price, max sticker = out-the-door ÷ (1 + rate). Subtracting instead would overstate what you can afford by a few hundred dollars.
- Total interest is payments × months minus the loan amount, which assumes a simple-interest loan paid on schedule.
- Tax and fee rates vary from about 6% to 12% by state once sales tax, registration, title and documentation fees are combined. Check yours; doc fees in particular are capped in some states and unlimited in others.
- Not modelled: trade-in value, negative equity rolled in from a previous loan, manufacturer rebates, gap insurance, and extended warranties financed into the loan.
- Ownership cost ranges are US planning figures gathered September 2026 for an average sedan at 12,000 miles a year. Insurance in particular varies enormously by driver, location and vehicle.
Reviewed September 2026.
Figures reviewed . Every worked example on this page is checked against the calculator above.
Car Affordability Calculator: frequently asked questions
How much car can I afford?
Set a monthly payment you are comfortable with and this shows the sticker price it supports. At $450 a month over 60 months at 7% with $5,000 down, that is about $25,672 after 8% tax and fees. Keep all car costs under roughly 20% of take-home pay.
What car can I afford on a $400 a month budget?
About $23,334 sticker price at 7% APR over 60 months with $5,000 down and 8% tax and fees. Dropping the term to 48 months lowers that to about $19,500 but saves you around $1,500 in interest.
What percentage of income should a car payment be?
Under 10 to 15% of monthly take-home pay for the payment itself, and under about 20% for all transportation costs including insurance, fuel and maintenance. The widely cited 20/4/10 rule is stricter still.
Should I include insurance in my car budget?
Yes. Insurance, fuel, maintenance and registration commonly add $260 to $500 a month, which is 60 to 110% on top of a $450 payment. Get an insurance quote for the specific model before you commit.
Does the calculator include tax, title and fees?
Yes, if you enter a percentage. Those are charged on the sticker price, so the calculator divides rather than subtracts to find the price you can actually shop for. At 8% on a $27,726 budget that is a $25,672 car plus $2,054 in tax and fees.
Is a 72 or 84 month car loan a bad idea?
Usually. Going from 48 to 84 months at the same payment buys about $10,200 more car but costs $5,176 more in interest, and the car depreciates faster than the loan pays down, leaving you underwater for years.
How much difference does the interest rate make?
A lot. On the same $450 payment, a 3% rate supports a $27,818 car and 12% supports $23,361 — a $4,457 gap. Getting pre-approved by your own bank before visiting a dealer is the cheapest step in the whole process.
What is the 20/4/10 rule?
Put 20% down, finance for no more than 4 years, and keep total transportation costs under 10% of gross income. It is deliberately conservative and few buyers meet all three, but failing all three at once is a sign to buy a cheaper car.