Car Affordability Calculator
Find out the maximum car price you can afford based on the 15% of income guideline.
Read the Guide
Find out the maximum car price you can afford based on the 15% of income guideline.
Read the GuideYour total monthly income before taxes.
Financial experts recommend no more than 15% of gross income.
Average US auto insurance is $1,500–$2,000/year.
Oil changes, tires, repairs, registration, etc.
Average annual fuel spend at current prices.
Financial experts generally recommend keeping your total car payment at or below 15–20% of your gross monthly income and total transportation costs (payment + insurance + fuel + maintenance) below 20–25%. The maximum car price is derived by solving the loan payment formula in reverse — given a target payment, rate, and term, what principal does that support?
Max Payment = Monthly Income × (Payment % / 100) | Max Car Price = Payment × [(1 − (1 + r)^−n) / r] | where r = monthly rate, n = monthsAt $5,000/month gross income with a 15% payment limit, your max monthly payment is $750. At 6% over 60 months, that supports a loan of about $38,900. After adding insurance, fuel, and maintenance, total monthly transportation cost could be around $1,200 — ensure that fits your budget.
Extending from 48 to 72 months can increase the affordable car price by $5,000–$8,000, but you pay significantly more in total interest and risk being 'underwater' on the loan. Try to stay at 60 months or less for new cars.
Max car price is calculated by solving P = PMT × (1 − (1 + r)^−n) / r for P, where PMT = monthlyIncome × (maxCarPaymentPercent / 100). Total cost of ownership includes all monthly ownership costs multiplied by term months.