Car Affordability Calculator

Existing loan and card payments.
Finance

Work out how much car you can afford. Enter your monthly income, existing debt, down payment, loan rate, and term, and this calculator applies the 15%-of-income rule to estimate your max monthly car payment, the loan you can support, and the total car price within reach.

Formula

Max Payment ≈ 15% of Monthly Income − Other Debt; Affordable Price = Loan Principal + Down Payment
  • A common guideline keeps your total car payment at or below 15% of monthly take-home income.
  • Your existing debt payments are subtracted, since they already use part of your budget.
  • The affordable loan principal is the present value of that monthly payment over the loan term at the given rate.
  • Adding your down payment to the loan principal gives the total car price you can target.
  • Lower rates and longer terms increase the principal you can borrow for the same monthly payment.
  • Remember to budget separately for insurance, fuel, and maintenance — they're not included here.

$5,000 income, $600 debt, $4,000 down, 7% / 5 yr

Inputs
  • Monthly Income: 5000
  • Other Monthly Debt: 600
  • Down Payment: 4000
  • Annual Loan Rate (%): 7
  • Loan Term (years): 5

Max payment = 15% × $5,000 − $600 = $750 − $600 = $150/mo. At 7% over 60 months that supports about $7,575 of loan; adding the $4,000 down payment gives roughly $11,575 of affordable car.

Frequently asked questions

How much of my income should go to a car?
A widely used rule keeps the monthly payment at or below 15% of your take-home pay. Some stricter guides use 10%, and the total cost of ownership under 20% including insurance and fuel.
Does a bigger down payment help?
Yes. A larger down payment adds directly to the price you can afford and reduces the loan you need, which lowers interest paid over the term.
Why does the loan rate matter so much?
A lower rate means more of each payment goes to principal, so the same monthly budget supports a larger loan. A higher rate shrinks the affordable loan.
Does this include running costs?
No. It covers the purchase budget only. Add insurance, fuel, tax, and maintenance to your monthly plan before committing to a payment.