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Car Affordability Calculator

Estimate how expensive a car your income supports using the 20/4/10 guideline: put at least 20% down, finance for no more than 4 years, and keep all car costs under 10% of your gross monthly income. Every part of the guideline can be adjusted.

Quick examples
$

Before tax.

%

The guideline says 10%, covering the payment, insurance and fuel.

$
%
years
%
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Car price you can afford$18,270.09
Maximum monthly payment
$350.00
Loan amount
$14,616.07
Down payment
$3,654.02
Total interest
$2,183.93
Monthly budget for all car costs
$600.00
How the price is paid
  • Down payment
  • Loan

Saved setups

Save a set of inputs you reuse — your usual rate, your loan, your room sizes — and load it back in one tap.

    Your recent calculations

    Results you calculate here are kept on this device so you can come back to them.

      Formula

      Car budget = gross monthly income × budget %
      Maximum payment = car budget − insurance, fuel and maintenance
      Loan amount = payment × (1 − (1 + r)^−n) ÷ r, where r is the monthly rate and n the number of months
      Car price = loan amount ÷ (1 − down payment %)

      How to use it

      1. Enter your gross monthly income.
      2. Enter what you expect to spend each month on insurance, fuel and maintenance.
      3. Keep the 20% down, 4 years and 10% settings, or change them.
      4. Enter the loan APR you expect and read the affordable price.

      Worked examples

      $6,000 a month gross, $250 a month for insurance and fuel, 20% down and a 4-year loan at 7%

      Monthly budget for all car costs
      $600.00
      Maximum monthly payment
      $350.00
      Loan amount
      $14,616.07
      Car price you can afford
      $18,270.09
      Down payment
      $3,654.02
      Total interest
      $2,183.93

      $8,000 a month gross, $300 of other costs, 20% down and a 4-year loan at 0%

      Monthly budget for all car costs
      $800.00
      Maximum monthly payment
      $500.00
      Loan amount
      $24,000.00
      Car price you can afford
      $30,000.00
      Down payment
      $6,000.00
      Total interest
      $0.00

      What 20/4/10 means

      20% down keeps you from owing more than the car is worth as it depreciates. A term of four years or less limits interest and means the car is paid off while it still has plenty of life left. Keeping the payment plus insurance, fuel and upkeep under 10% of gross income leaves room for housing, savings and everything else.

      It is a guideline, not a rule or a lending standard. Lenders will often approve much more than this, and many people choose to spend more or less. Stretching the loan to six or seven years raises the price you can “afford” on paper, but it increases the total interest and the time you spend owing more than the car is worth.

      Reading the result

      The price shown is the total you can cover, so sales tax, registration and dealer fees have to fit inside it. A trade-in counts toward the down payment. This calculator is a budgeting estimate and not financial advice; your own debts, savings and job security matter as much as the percentages.

      Questions people ask

      How much car can I afford on a $72,000 salary?

      That is $6,000 a month gross, so 10% is $600 for all car costs. With $250 a month for insurance and fuel, $350 is left for the payment, which supports a loan of about $14,600 over 4 years at 7% and a car of about $18,300 with 20% down.

      What is the 20/4/10 rule for buying a car?

      Put down at least 20%, finance for no longer than 4 years, and keep total monthly vehicle costs at or below 10% of gross monthly income.

      Does the 10% include insurance and gas?

      Yes. In the usual statement of the guideline, the 10% covers the loan payment, insurance and fuel, and some versions include maintenance as well.

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