Car Affordability Calculator
Work out how much car you can afford from your income rather than from a monthly payment. Enter your gross income, existing debts, down payment, rate and term to see your maximum payment, loan amount and car price.
Input Details
Enter every amount below in $. Changing this switches the unit — figures are not converted.
Rent or mortgage, student loans, credit cards and any other loans. Leave blank if none.
Results
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How Much Car Can You Actually Afford?
Car shopping normally runs backwards. You pick a car, the finance office finds a monthly payment that fits, and the term stretches until the number sounds reasonable. This calculator runs it the right way round: it starts from your income and tells you what price that income supports.
Two ceilings apply. The first is the share of income going to the car payment — around 10% of gross monthly income is the conventional guide. The second is your total debt-to-income ratio: all monthly debt payments together, ideally under 36% of gross income. The calculator applies whichever is stricter, because a payment that passes one test and fails the other is still a problem.
What car price fits each salary
Every figure below is computed at 10% of gross income, a 6.35% APR over 60 months, with no down payment — so treat each as a floor. Any cash down or trade-in raises the price you can reach. The 6.35% rate is Experian's average new-car loan APR for Q2 2026; use your own quoted rate in the calculator above.
| Annual salary | Max monthly payment | Loan it supports |
|---|---|---|
| $40,000 | $333 | $17,098 |
| $50,000 | $417 | $21,372 |
| $60,000 | $500 | $25,646 |
| $75,000 | $625 | $32,058 |
| $100,000 | $833 | $42,744 |
| $120,000 | $1,000 | $51,293 |
Here is the uncomfortable comparison. The average new-car payment in the US is about $765 a month, which only clears the same 10% test at a household income of roughly $91,800 a year. Most buyers signing that payment are not earning it — which is why the used market, not the new one, is where most budgets genuinely land.
The 20/4/10 rule, and why it still matters
The old guideline says put 20% down, finance for no more than 4 years, and keep total vehicle costs under 10% of gross income. Hardly anyone follows it now — the average loan runs close to six years — but it works as a stress test. If a car only fits at 72 or 84 months, the honest conclusion is that the car is too expensive, not that the term is too short. The Car Loan Cost Index shows what those extra years cost in interest.
Why the down payment matters more than the payment
A down payment does more than trim the monthly figure. A new car loses value fastest in its first year, so a small deposit spread over a long term can leave you owing more than the car is worth — negative equity — which only becomes visible when you need to sell or trade in early. Putting real money down is what keeps you on the right side of that line.
What this calculator leaves out
It sizes the loan payment only. Sales tax, title, registration, insurance, fuel and maintenance all sit on top, and they are not small: insurance in particular tends to be higher on a financed car because lenders require comprehensive and collision coverage. Your interest rate also depends heavily on your credit — see what credit score you need to buy a car — so use a rate you can realistically expect rather than a headline one.
Once you have a price in mind, the auto loan calculator works the other direction and shows the payment and total interest for a specific car.
Frequently asked questions
- A common guideline caps the car payment at about 10% of your gross monthly income. On a $50,000 salary that is roughly $417 a month, which supports a loan of about $21,400 over 60 months at a 6.35% APR — plus whatever you put down. On $75,000 it is about $625 a month and roughly $32,100 of loan. Those are floors, not ceilings: a down payment or trade-in raises the price you can reach.
- Around 10% of gross monthly income for the loan payment itself, with total vehicle costs — payment, insurance, fuel, maintenance and registration — staying under roughly 15–20%. These are rules of thumb rather than lending limits. A lender may approve you for far more, because approval measures whether you can repay, not whether the payment leaves room for savings.
- Put at least 20% down, finance for no more than 4 years, and keep total vehicle costs under 10% of gross income. Almost nobody follows it now — average loan terms run close to six years — but it remains a useful stress test. If a car only fits your budget at 72 or 84 months, the honest reading is that the car is too expensive rather than that the term is too short.
- No. It sizes the loan payment only, so treat the result as a maximum before running costs. Sales tax, title, registration, insurance, fuel and maintenance are all extra, and insurance in particular can be materially higher on a financed car because lenders require comprehensive and collision cover. Budget for those before spending your full result.
- 20% on a new car and around 10% on a used one is the traditional target. The reason is depreciation rather than the payment: a new car loses value fastest in its first year, so a small down payment on a long term can leave you owing more than the car is worth — negative equity — which becomes a real problem if you need to sell or trade in early.
- Because a lender is answering a different question. Approval is about the likelihood you repay, and it is often assessed with a longer term to make the payment look manageable. This calculator asks what leaves your budget intact. When the two disagree, the gap is usually the loan term — and stretching the term is what quietly raises the total cost of the car.
- Yes, but realistically a used one. At 10% of gross income a $40,000 salary supports about $333 a month, which is roughly $17,100 of loan over 60 months at 6.35% — before any down payment. For context, the average new-car payment in the US is about $765 a month, a figure that only clears the same 10% test at an income near $92,000.
- A cheaper car, in almost every case. A longer term lowers the monthly payment but raises total interest and keeps you in negative equity for longer. Buying less car achieves the same affordable payment without either cost. If you already hold a long loan, paying extra toward principal is the way back out.
Related reading
- How Much Car Can I Afford? The 20/4/10 Rule Explained
- What Is the Average Car Payment? New, Used and Lease
- How Does a Car Loan Work?
- What Credit Score Do You Need to Buy a Car?
- Car Loan Cost Index: What a Longer Loan Term Really Costs
- Negative Equity Car Loan: What It Is and How to Get Out
- Should I Pay Off My Car Loan Early?
- Personal Finance Glossary: Money Terms Explained