Car Affordability Calculator
Find your max car budget using two proven methods: the 20% income rule and the 15% DTI method. See max price, monthly payment, and total loan cost.
How to use Car Affordability Calculator
The car affordability calculator tells you the maximum vehicle price you can safely consider based on your gross income and debt load, using two proven methods: the 20% annual-income rule and the 15% debt-to-income (DTI) method. See the recommended price range, maximum monthly payment, and how a down payment and loan terms affect what you can actually afford.
- Enter your gross annual income.
- Add any existing monthly debt payments (student loans, credit cards, etc.).
- Enter your planned down payment.
- Set the interest rate and loan term.
- Review the recommended car price range from both methods.
Your data never leaves your device — 100% private processing.
The 20% income rule vs the 15% DTI method
The 20% rule suggests keeping total vehicle cost (price + taxes + fees) below 20% of gross annual income. The 15% DTI method limits your total monthly auto costs (payment + insurance) to 15% of gross monthly income. Both are conservative guidelines; the more restrictive result is the safer budget. Lenders typically approve up to 43% total DTI, but that leaves little financial cushion.
| Annual income | Max car price | Est. monthly payment | Recommended down |
|---|---|---|---|
| $40,000 | ~$8,000 | ~$158 | ~$2,400 |
| $60,000 | ~$12,000 | ~$238 | ~$3,600 |
| $80,000 | ~$16,000 | ~$317 | ~$4,800 |
| $100,000 | ~$20,000 | ~$396 | ~$6,000 |
| $150,000 | ~$30,000 | ~$594 | ~$9,000 |
Down payment, loan terms and total cost
A larger down payment reduces the amount financed, lowering both the monthly payment and total interest paid. Aim for at least 20% down to avoid being "underwater" (owing more than the car is worth) as depreciation accelerates in year one. Shorter loan terms (36–48 months) cost more monthly but far less in total interest than 72- or 84-month terms.
Glossary
- DTI
- Debt-to-Income ratio — total monthly debt payments ÷ gross monthly income.
- 20% rule
- Keep total vehicle cost below 20% of gross annual income.
- Negative equity
- Owing more on the loan than the car is currently worth.
- Down payment
- Cash paid upfront, reducing the amount financed.
Related reading
Frequently Asked Questions
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Why use Car Affordability Calculator?
- Covers all major auto loan and leasing calculations
- Fuel cost comparisons with real MPG/L/100km data
- Instant results with no spreadsheet required
- Supports both metric and imperial units
Common use cases
- Calculate monthly payments on a car loan
- Compare the total cost of owning vs leasing
- Estimate annual fuel costs for a vehicle
- Calculate depreciation over 5 years
- Find out true cost of ownership including insurance
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