Car Affordability Calculator
Find out how much car you can truly afford based on your income, debts, and budget — before you fall in love with something that doesn’t fit your finances.
Get pre-approved before you shop
Know your rate before the dealership quotes you one. It takes minutes and gives you real leverage.
The 15% Rule for Car Payments
Most financial advisors recommend keeping your total car costs (payment + insurance + gas + maintenance) under 15% of take-home pay. A stricter 10% guideline applies to the payment alone.
Remember: the car payment is just the start. Budget ~$150–$250/month for insurance, ~$150/month for gas, and ~$100/month for maintenance. These often get overlooked when shoppers focus only on the payment.
Car Affordability: Real Budget Examples
Example 1: $5,000/Month Take-Home — How Much Car Can You Afford?
On $5,000/month take-home pay with $400/month in existing debt payments, the 15% rule gives you a max car payment of $5,000 x 15% – $400 = $350/month. At 6.5% for 60 months with $2,000 down, that payment buys approximately $18,500 in total vehicle cost. The conservative 10% rule puts you at $100/month max payment and around $8,000 total — a strong argument for buying used in this income range.
Example 2: $8,500/Month Take-Home — Buying New vs. Used
With $8,500/month take-home and no other debts, 15% gives a max payment of $1,275/month. At 6.5% for 60 months with $5,000 down, you can afford up to $59,000 in total vehicle cost. A $55,000 new SUV fits comfortably. But the conservative 10% approach gives $850/month and about $40,000 in vehicle cost — a two-year-old certified pre-owned version of the same SUV often at $38,000–$42,000, saving $8,000+ instantly from avoided depreciation.
Example 3: The True Monthly Cost of Car Ownership
A $600/month car payment is just the start. Add $200/month insurance, $150/month fuel, $100/month maintenance and you are at $1,050/month total. On a $6,000/month take-home, that is 17.5% of income — above the recommended 15% total. Many buyers focus only on the payment and then find themselves stretched when insurance renewal or a repair bill arrives. Always calculate total monthly car cost, not just the loan payment.
Example 4: Pre-Approval Changes Your Negotiating Power
Two buyers both want a $32,000 car. Buyer A walks in without pre-approval and accepts dealer financing at 8.9% for 60 months: $662/month, $7,720 in interest. Buyer B gets pre-approved at their credit union at 5.9% for 60 months and negotiates using that rate: $617/month, $5,020 in interest. Buyer B saves $45/month and $2,700 in total interest — just from a 10-minute pre-approval step.