Car affordability calculator
Work backward from a monthly payment you can actually afford to the maximum car price that fits it — instead of starting from a sticker price and hoping the payment works out.
Max monthly payment
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Max loan amount
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Max car price you can afford
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Last updated: September 2026 · Verified by Hugo Cardozo.
Why start from the payment, not the price
Dealers and lenders will often approve a loan based on what you qualify for, not what actually fits your budget comfortably alongside insurance, gas, maintenance, and everything else you're paying for. Starting from a monthly payment you've already decided is affordable, then working backward to a maximum price, keeps the decision in your control.
How the maximum loan amount is calculated
This uses the standard loan amortization formula solved for the loan amount: given your maximum monthly payment, the interest rate, and the loan term, it calculates the largest loan balance that payment can cover. Adding your down payment and trade-in value to that loan amount gives the maximum total car price.
Worked example
With $5,000/month take-home income and a 15% budget guideline, that's a $750 maximum monthly payment. At 6.5% for 60 months, that payment supports a loan of about $38,300. Add a $3,000 down payment and the maximum car price comes out to roughly $41,300.
Don't forget the rest of the cost of owning a car
The loan payment is only part of it — insurance, fuel, maintenance, and registration all add up, often to $300-$600/month depending on the vehicle and your location. Many financial guidelines suggest keeping the loan payment itself under 10-15% of take-home pay specifically so there's room left for these other costs.
Frequently asked questions
What percentage of income should a car payment be?
A commonly cited guideline is 10-15% of take-home pay for the loan payment alone, leaving room for insurance and fuel within a broader "20% of income for all transportation costs" rule of thumb.
Does this include sales tax and fees?
No — this calculates the maximum price based on financing math alone. Sales tax, registration, and dealer fees would need to fit within (or be added on top of) this budget depending on how you're financing them.
Should I use a longer loan term to afford a more expensive car?
A longer term does increase the maximum price this calculator returns, but it also means paying more total interest and staying "underwater" (owing more than the car is worth) for longer as the car depreciates — a shorter term with a smaller car price is usually the more conservative choice.
📘 Related guide
Read the full guide: "How Much Car Can You Actually Afford?".
How Much Car Can You Afford