Car Affordability Calculator (Max Price From Income)
Find the maximum car price you can afford based on monthly income, term, rate, and down payment.
What this calculates
The 20/4/10 rule of car affordability: 20% down, ≤4-year loan, total transportation ≤10% of gross income. This calculator solves for max sticker price given monthly payment budget, loan terms, and down payment.
Formula & how it works
Max payment = monthly_income × payment_pct. Loan_PV = payment × (1 − (1+r)^−n) / r where r = APR/12, n = months. Max price = loan_PV + down_payment.
Worked example
$6,500/mo income, 10% budget = $650/mo. 60 months at 7%. Loan PV = $32,800. Plus $5,000 down = $37,800 max price.
Frequently asked questions
Why 10%?
Includes loan, insurance, fuel, maintenance. Loan alone should be 7-8%; full TCO closer to 15-20% for many drivers.
Buy vs lease?
Lease lowers monthly but never builds equity. Buy used 2-3 years old for best value (heaviest depreciation already absorbed).
Don't include trade-in?
Treat trade-in as effective down payment. Get a written offer separately so dealer can't bundle it.
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- Lease PaymentCalculate monthly lease payment from MSRP, negotiated price, residual value, money factor, and lease term.
- Car DepreciationProject your car's resale value year by year using typical depreciation curves for new and used vehicles.