Car Affordability Calculator
What car can you afford? The 20/4/10 rule: 20% down, 4-year loan, payment ≤10% of gross income. Enter your income, down payment, and terms to see your max car price. Free, no signup.
Example: $72K income, $5K down, 5-year loan at 7%, 10% rule
Max monthly payment
$600
Max car price
$35,301.20
Max loan amount
$30,301.20
Down payment
$5,000
At $72,000/year with 10% rule: max payment $600/mo. With $5,000 down, 5-year loan at 7%: max car $35,301.20.
Source: FinCalc server-rendered example using the same formulas as the interactive calculator.
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FinCalc AI
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Frequently asked questions
What car can I afford?
The 20/4/10 rule: put 20% down, finance for no more than 4 years, and keep the payment at or below 10% of your gross income. For $72,000/year, that's $600/month max — which at 7% for 5 years supports a $30,301.20 loan. Add your down payment for max car price.
What is the 20/4/10 rule?
20% down payment, 4-year loan max, payment ≤10% of gross monthly income. It prevents overspending on a car and keeps total transportation costs manageable. Adjust for your situation — some use 15% of income.
How much should I spend on a car payment?
Financial experts recommend no more than 10–15% of gross monthly income. At $6,000/month gross, that's $600–$900. Include insurance and maintenance in your total car budget — they can add 50–100% to the payment.
Should I put more down on a car?
A larger down payment reduces the loan, monthly payment, and total interest. It also helps if the car depreciates faster than you pay it off (negative equity). Aim for at least 20% to align with the 20/4/10 rule.
How much interest does the maximum loan cost?
On this page's example, $5,698.80. The ceiling is $600 a month for 60 months, or $36,000 paid in total, against a loan of $30,301.20 — the difference is interest. It is a finance cost sitting on top of a car the engine has already called your maximum, and it does not appear in the max car price. A shorter term reduces both the loan you qualify for and the interest you pay on it.
Does the max car price include tax, title and fees?
No. The engine adds the loan amount to your down payment and stops there. Sales tax, registration, title, documentation fees and any dealer add-ons sit on top of the figure shown, and when they are financed they push the real payment above the ceiling the rule set. Subtract an allowance for them from the max car price before you shop, or treat the result as covering a car and its paperwork together.
Does the calculator check that my down payment is 20%?
No. The 20 in 20/4/10 is guidance the engine does not enforce — it adds whatever down payment you enter to the loan and reports the sum. This page's example puts $5,000 against a $35,301.20 car, which is 14.2%, not 20%. Reaching 20% of that price would take $7,060.24, or $2,060.24 more cash than the example puts down.
What changes if I pick the 15% or 20% payment rule instead of 10%?
Only the payment ceiling — and everything scales from it. On $6,000 of gross monthly income the ceiling moves from $600 to $900 or $1,200. Because the loan amount is the payment multiplied by an annuity factor that depends only on the rate and the term, the maximum loan rises in exact proportion to the payment. The rate, the term and your running costs are unchanged: the higher settings loosen the guardrail, not your budget.
What's Next?
How the math works
lib/calculators/carAffordability.ts works backwards from a payment, not forwards from a price. Gross annual income is divided by 12 and multiplied by the payment share, which is clamped to 5–25%: $72,000 gives $6,000 a month and, under the 10% rule, a $600 ceiling. That payment is converted into a loan balance with the present value of an ordinary annuity — loan = payment × ((1 + i)^n − 1) ÷ (i × (1 + i)^n), where i is the annual rate ÷ 12 and n is term × 12. At 7% over 60 months, $600 supports $30,301.20. Max car price is that loan plus whatever down payment you typed: $30,301.20 + $5,000 = $35,301.20. Term is clamped to 1–8 years and the rate to 0–30%. Nothing else enters the model: no sales tax, title, registration, insurance, or trade-in. The engine also never enforces the 20 or the 4 in 20/4/10.
Using the result
The number this page returns is a financing ceiling, not a purchase price, and two gaps are worth closing before you shop. First, the rule's own terms. The example runs a 5-year loan with $5,000 down on a $35,301.20 car — 14.2% down rather than the 20% the rule names, over a year longer than the four it allows. Reaching 20% here would take $7,060.24, another $2,060.24 in cash. Shortening the term to four years lowers the maximum loan at the same $600 payment. Second, the costs the engine ignores. Sales tax and fees are paid on top of the price it shows, and running costs are absent entirely; the true cost of ownership calculator adds insurance, fuel, maintenance, depreciation, registration and parking to the loan payment. Budget against that total, not the payment.
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