Car Affordability Calculator

Start from the monthly payment you are comfortable with and see the most you should spend on a car.

Car price you can afford (before tax)—

Loan amount—
Sales tax on that price—
Total interest—
Total paid (payments + down + trade-in)—
Payment as % of take-home pay—

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Estimates for education only — not financial, tax or legal advice. Lenders may calculate taxes and fees differently by state or province. Always check your contract.

How much car can I afford?

Most people shop by monthly payment, but dealers sell by price. This calculator works backwards: it takes the payment you can afford, the loan rate and the term, and finds the loan amount that payment can repay. Then it adds your cash down payment and trade-in, removes fees and sales tax, and gives you the highest car price that fits your budget.

Loan amount = payment × (1 − (1 + r)^−n) ÷ r (r = APR ÷ 12, n = months) Car price = (loan amount + down payment + trade-in − fees) ÷ (1 + sales tax rate)

Worked example

With a budget of $500 a month at 7% APR for 60 months, you can borrow about $25,251. Add $3,000 down and a $2,000 trade-in, subtract $500 of fees and 6% sales tax, and the most you should pay is about $28,067. Over the loan you would pay about $4,749 in interest.

Rules of thumb for a car budget

10–15% of take-home pay for the car payment is a common guideline. Fill in the optional income field to check yours.
Keep total car costs — payment, insurance, fuel and maintenance — under about 20% of take-home pay.
Shorter loans (36–48 months) cost much less interest, but the same payment buys less car.
A down payment of 10–20% helps you avoid owing more than the car is worth in the first years.

Leasing instead?

The same monthly amount usually leases a more expensive car, because a lease only charges for the depreciation. Compare both with the car lease calculator and the lease vs buy calculator.

Frequently asked questions

How much car can I afford on my salary?

A common guideline is to keep the car payment around 10–15% of your monthly take-home pay. Enter that payment here with your loan rate and term to get a price.

Does the calculator include sales tax and fees?

Yes. It assumes you pay the fees from your cash and that sales tax is charged on the car price, then finds the price that still fits your budget.

What loan term should I use?

60 months is the most common for new cars, but 36–48 months saves a lot of interest. Longer terms make it easier to owe more than the car is worth.

How does a trade-in affect what I can afford?

The trade-in value works like extra down payment. Use the value left after any loan still owed on that car is paid off.

Is the result a loan approval?

No. It is an estimate. Your real rate depends on your credit, the lender and the car, so get a pre-approval before you shop.