Car Affordability Calculator
This car affordability calculator estimates the maximum car price you can comfortably afford, based on your income and a target auto-payment budget — a ceiling to shop within before you fall for a car outside your budget.
Your income before tax.
A common guideline is 10-15% of gross monthly income for the payment alone, or up to 20% including insurance.
Cash you have to put down.
The rate you expect to qualify for.
Length of the loan.
Maximum car price
$47,915
How to use this car affordability calculator
- 1Gross monthly income: your income before tax.
- 2Maximum auto payment budget: 10-15% of gross monthly income for the payment alone is a common guideline; go lower if you also want to budget for insurance and maintenance within that same share.
- 3Down payment, loan rate and term: the financing terms you expect to use.
Understanding your results
Maximum car price is your down payment plus the largest loan your budgeted payment can support at your expected rate and term. This is a budget ceiling, not a target — many buyers are better off well under this number, especially once insurance, fuel and maintenance are added to the same monthly budget.
The formula
Max payment = Income × Budget% · Max loan = solved from that paymentThe calculator first applies your chosen percentage to your gross monthly income to find your payment budget, then solves backward — using the standard loan payment formula in reverse — to find the largest loan that fits inside that payment at your given rate and term.
A worked example
A $6,000 monthly income with a 15% budget allows a $900 monthly payment. At 7.5% APR over 60 months, that supports a loan of roughly $44,900 — plus a $3,000 down payment, a maximum car price around $47,900.
Notes for the UK, US and India
This estimate covers the loan payment only — insurance, fuel, maintenance and registration all add to your real monthly car cost, and can easily add another 5-10% of income on top. Many financial guidelines suggest keeping total car costs (not just the payment) under 15-20% of take-home pay.
Frequently asked questions
Does this include insurance and maintenance?+
No — this is the loan payment only. Add your expected insurance premium and a maintenance estimate separately to see your true total monthly car cost before deciding on a price.
Should I use gross or take-home income?+
This calculator uses gross income to match the common 10-15%-of-gross guideline, but budgeting against your take-home (net) pay via the paycheck calculator gives a more conservative, often more realistic, ceiling.
Is a longer loan term a good way to afford a more expensive car?+
It lowers the monthly payment, but extends how long you're paying interest and increases the risk of owing more than the car is worth for longer — treat term length as a tradeoff, not a free way to afford more car.