Car Affordability Calculator
Find out how much car you can afford based on your monthly income, existing debts, down payment, and loan terms.
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Loan Term
Estimated Affordable Vehicle Price
$37,674.19
15% of monthly income rule
Monthly Cost Breakdown
- Estimated Loan Payment
- $750.00
- Insurance
- $150.00
- Fuel & Maintenance
- $200.00
- Total Monthly Car Cost
- $1,100.00
- Payment-to-Income
- 15.0%
- Total Cost-to-Income
- 22.0%
Loan Summary
- Amount Financed
- $37,876.50
- Total Interest
- $7,123.50
- Total Loan Cost
- $45,000.00
Estimate only. Actual loan approval depends on your credit score and lender. Does not include registration fees or dealer add-ons.
Disclaimer: This calculator provides estimates for planning purposes only. Actual loan approval depends on your credit score, lender policies, and other factors. Consult your lender before committing to a purchase.
The 15% Rule for Car Buying
Financial experts often recommend keeping your monthly car payment at or below 15% of your gross monthly income. If you earn $5,000/month, that means a maximum payment of $750. This calculator uses this guideline unless you specify a custom budget.
Total Cost of Car Ownership
Your car payment is just one expense. Budget for insurance (often $100–250/month), fuel ($100–200+/month), maintenance and repairs ($80–150/month average), and depreciation. The total monthly cost of ownership is often 1.5–2× the loan payment alone.
Frequently Asked Questions
- A common guideline is to keep your monthly car payment under 15% of your gross monthly income. Total car costs (payment + insurance + fuel/maintenance) should ideally stay under 20% of income.
- Yes. A down payment of 10–20% reduces your loan amount, lowers monthly payments, reduces total interest paid, and helps you avoid being underwater on the loan (owing more than the car is worth).
- Trade-in value is applied directly to reduce the amount you need to finance, similar to a down payment. This lowers your monthly payment and total interest paid.
- A 72-month term lowers monthly payments but significantly increases total interest paid. Cars also depreciate quickly, so a long loan increases the risk of being underwater. Aim for 48–60 months when possible.