Car Affordability Calculator
Work out the car price your income supports, including insurance, fuel and maintenance — not just the loan payment.
Your details
Negative equity gets rolled into the new loan, which is where car debt spirals begin.
Running costs
Enter your own local rate — this varies by state, county and city.
This calculator runs entirely on your device. Nothing you enter is uploaded, stored, or sold. How this works
Car price you can afford
$17,590
$310.00/mo payment plus $390.00 running costs
Includes your inputs, the full breakdown, and every row of the table.
Total transport budget
$700.00
Available for the payment
$310.00
Maximum loan
$12,821
Cash and equity in
$6,000
- Gross monthly income
- $7,000
- Transport cap at 10% of gross
- $700.00
- Insurance, fuel and maintenance
- −$390.00
- Left for the loan payment
- $310.00
- Down payment
- $6,000
- Maximum financed amount
- $12,821
- Sales tax and fees at 7.00%
- −$1,231
- Vehicle price you can afford
- $17,590
- Total interest over the term
- $2,059
| Term | Car price | Loan | Interest paid | Verdict |
|---|---|---|---|---|
| 36 months | $14,921 | $9,966 | $1,194 | Sound |
| 48 months | $17,590 | $12,821 | $2,059 | Sound |
| 60 months | $20,066 | $15,471 | $3,129 | Stretching |
| 72 months | $22,364 | $17,929 | $4,391 | Underwater risk |
| 84 months | $24,496 | $20,211 | $5,829 | Underwater risk |
What this means
- The 20/4/10 rule wants at least $3,518 down on this price, a term no longer than 48 months, and all transport costs inside $700.00. You are currently putting 34% down.
- Most cars lose twenty percent of their value in the first year. A larger down payment is the only reliable way to avoid owing more than the car is worth.
- Insurance is the cost people most often underestimate, and it is not proportional to price — sports cars, EVs and anything with expensive sensors in the bumpers cost far more to insure than the sticker suggests. Get a quote on the specific model before committing.
How the car affordability calculation works
The mistake almost every car buyer makes is budgeting against the monthly payment rather than the total cost of running the car. Dealers encourage this, because a payment can always be made to fit by stretching the term — a seventy-two or eighty-four month loan makes almost any car look affordable while quietly adding thousands in interest and keeping you underwater for years.
The 20/4/10 rule exists to counter that. Twenty percent down, a term no longer than four years, and total transport costs — payment, insurance, fuel and maintenance combined — under ten percent of gross income. The twenty percent covers first-year depreciation so you are not immediately upside down. The four-year cap keeps total interest reasonable and roughly matches the period before major maintenance starts. The ten percent ceiling is the part that actually protects your budget, because it counts everything rather than just the loan.
That last point is where this calculator differs from most. Insurance, fuel and maintenance on a typical car run three to four hundred dollars a month before you make a single loan payment, and treating them as separate from the car budget is how people end up house-poor in a driveway. The affordable price shown here is what remains after those costs are subtracted from your transport envelope, which is a smaller and considerably more honest number.
Frequently asked questions
What is the 20/4/10 rule?
Put twenty percent down, finance for no more than four years, and keep total transport costs — payment, insurance, fuel and maintenance — under ten percent of gross monthly income. It is conservative by design and keeps you from being underwater on a depreciating asset.
Is a 72 or 84 month car loan a bad idea?
Usually. Long terms lower the payment but leave you owing more than the car is worth for most of the loan, so trading out or dealing with a write-off becomes expensive. If you need eighty-four months to afford a car, that is strong evidence the car is too expensive.
Should I count insurance in my car budget?
Absolutely, along with fuel and maintenance. These typically add three to four hundred dollars a month and vary hugely by model — the payment alone tells you very little about what the car actually costs to keep.
What happens if I still owe money on my trade-in?
The shortfall gets rolled into the new loan, so you finance a debt on a car you no longer own. You start the new loan underwater and pay interest on the old car for years. Paying that balance off separately before trading is almost always the better move.
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Disclaimer. This calculator is provided for general information and educational purposes only and does not constitute financial, tax, legal, medical, or engineering advice. Results are estimates based on the inputs you provide and the assumptions described above. Confirm any figure with a qualified professional before acting on it.