Simple Money Sheets

How Much Car Can I Afford?

Most car shopping starts with the price and works out the payment. This calculator does it the other way: you decide what you can spend each month, and it shows the most car that buys, the loan behind it, and how much more a longer loan costs. Nothing you type leaves your browser.

Use the APR you've been quoted or pre-approved for; it depends on your credit and the lender. Sales tax and registration fees vary by state, so check yours (6% is only a placeholder). If you owe more on your trade-in than it's worth, subtract the difference from the down payment.

What you can afford

Same budget, different loan lengths

Total paid = down payment + every loan payment. Insurance isn't included in it.

How the calculator works

  1. Monthly budget. $60,000 a year is $5,000 a month before taxes. 10% of that is $500 for the car payment and insurance together.
  2. Payment. Take out insurance ($150) and $350 a month is left for the loan.
  3. Loan. $350 a month for 48 months at 7% APR repays a loan of $14,616. This is the standard loan payment formula run backward, the same one the loan calculator uses.
  4. Price. The loan plus the $5,000 down payment is $19,616. That has to cover the price and 6% sales tax and fees, so the price is $19,616 ÷ 1.06 = $18,506.

Over the loan you pay 48 × $350 = $16,800, of which $2,184 is interest. Stretch the same $350 a month to 84 months and the price rises to $26,594, but interest jumps to $6,210, and you'd still be making payments in year seven.

Longer loans: a bigger car, a bigger bill

The table under the results shows the trade-off for your numbers. The Consumer Financial Protection Bureau puts it plainly: a longer loan "can reduce your monthly payment, but you pay more interest over the life of the loan," and it "also puts you at risk for negative equity," meaning you owe more than the car is worth. That matters if the car is totaled or you want to sell or trade it in early. The CFPB's 2024 study of about 34 million auto loans found that 11.6% included negative equity rolled over from a previous car, and those borrowers were more than twice as likely to have their account assigned to repossession within two years as borrowers with a positive trade-in.

The 20/4/10 rule

A common rule of thumb for buying a car is 20/4/10: put at least 20% down, finance for no more than 4 years, and keep the payment and insurance under 10% of gross income. It's a guideline, not a lender requirement, but it's a sensible starting point, and it's this calculator's default (10% and 48 months). The results tell you whether your down payment reaches 20% of the price.

The 10% doesn't cover everything. Gas, maintenance, repairs, registration, and parking come on top. If those are high where you live, or you already carry other debt, aim lower; the debt-to-income ratio calculator shows how a new car payment would look to a mortgage lender.

Ways to get more car for the same payment

  • Get pre-approved by a bank or credit union before you visit a dealer, so you know your rate and can compare the dealer's offer. Each point of APR on a $15,000, 4-year loan costs roughly $300 to $350 in interest.
  • Negotiate the price, not the payment. The CFPB notes you can negotiate the price, the interest rate, the trade-in value, and add-ons like extended warranties, separately.
  • Save a bigger down payment. Every extra dollar down is a dollar you don't pay interest on. The savings goal calculator shows how long it takes.
  • Price insurance before you choose the car. It's part of the budget, and it varies a lot by model.

FAQ

How much car can I afford on $50,000 a year?

With the defaults (10% of gross pay for payment and insurance, $150 insurance, $5,000 down, 7% APR, 48 months, 6% tax and fees), $50,000 a year gives $416.67 a month, a $266.67 payment, an $11,136 loan, and a price of about $15,223. Enter your own numbers above; the insurance and APR change the answer a lot.

Should I use gross or take-home pay?

The 10% rule is usually stated on gross pay, which is what this calculator uses. If your take-home pay is much lower than gross (for example, large retirement contributions or high state taxes), lower the percentage.

Is a 72 or 84 month car loan a bad idea?

It lowers the payment, but you pay much more interest and are more likely to owe more than the car is worth for years. If the only way to afford a car is a 7-year loan, that's usually a sign to look at a cheaper car.

Does this include the trade-in?

Yes: add your trade-in value to the down payment. Many states tax only the price minus the trade-in, which this calculator doesn't model, so if yours does, your price can be a little higher.

Does this calculator store my data?

No. Everything is calculated in your browser, and nothing you type is sent anywhere.

Sources

Last checked November 7, 2026. For education and planning only; your lender's numbers are what count.

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