How Much Car Can I Afford?
Based on your income and budget, see the realistic car price and payment you should target.
How much car can I afford?
Work backwards from your budget. If you take home $4,500 a month and cap all car costs at 15% ($675), subtract $350 for insurance, fuel and upkeep, leaving $325 for the payment. At 7.5% APR over 60 months that finances about $16,219; with $3,500 down you can target roughly a $19,720 car.
Your numbers
Target car price
$19,719
incl. your down payment
Affordable loan payment
$325
after insurance + fuel
Max you should finance
$16,219
Insight — The honest budget isn't just the payment — insurance, fuel and upkeep come out of the same paycheck. This tool reserves those first, so the price you target is one you can actually carry. The 20/4/10 guide (20% down, ≤4 years, total car costs under 10–15% of income) is a good sanity check.
Data behind the defaults
- 7.47%·Editorial estimate· as of 2026-07-17· medium confidence
These defaults are starting points from the sources above — every field is editable, and results are estimates, not quotes. All data sources →
What if % of income on car changes?
| % of income on car | Target car price |
|---|---|
| 8% | $3,999 |
| 10% | $8,491 |
| 12% | $12,982 |
| 15% · now | $19,719 |
| 20% | $30,948 |
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How this calculator works
Affordability is computed from the payment up, not the price down. The tool takes a share of your monthly take-home income as your total car budget, then reserves your insurance, fuel and upkeep first — because those come out of the same paycheck as the loan. Whatever is left becomes the affordable loan payment. That payment is run backwards through loan amortization at your APR and term to find the largest balance it can support, and your down payment is added on top to give a target purchase price you can realistically carry.
Formula
Loan payment budget = monthly income × budget % − running costs. Max financed = payment budget × (1 − (1 + monthly rate)^−months) ÷ monthly rate. Target price = max financed + down payment, where monthly rate = APR ÷ 12.
Worked example
$4,500 income × 15% = $675 total car budget. Minus $350 for insurance, fuel and upkeep = $325 left for the payment. At 7.5% APR (0.625%/month) over 60 months: $325 × (1 − 1.00625^−60) ÷ 0.00625 ≈ $16,219 financed. Add a $3,500 down payment → about a $19,720 target price.
What affects your result
- →Monthly take-home income
- →Percentage of income allotted to all car costs
- →Running costs reserved first — insurance, fuel and upkeep
- →Down payment, which adds directly to the target price
- →APR and loan term, which set how much a given payment can finance
What this estimate includes
- ✓A total monthly car budget from your income and chosen percentage
- ✓Running costs reserved before the loan payment
- ✓The resulting affordable loan payment
- ✓Maximum amount financed and a target price including your down payment
What it does not include
- ×Sales tax, registration and title fees
- ×Your other debts and overall debt-to-income ratio
- ×Credit-score-based APR pricing — it uses the APR you enter
- ×Regional cost differences — running costs are your single estimate, not an average
Good to know
Clear, practical answers about the car affordability calculator.
What percentage of income should go to a car payment?＋
Many financial planners suggest keeping the car payment under 10–15% of monthly take-home pay, and total car costs (payment, insurance, fuel) under about 20%. Going higher is the most common reason buyers feel 'car poor.'
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