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Enter the monthly payment that fits your budget — find the maximum car price you can afford, with the loan broken down.
This calculator works backward from the monthly payment you can comfortably afford to the maximum car price that payment supports. Instead of guessing at sticker prices, you enter a realistic payment, your down payment, the loan APR, and the loan term — and the calculator tells you the loan amount that payment buys plus the maximum purchase price. Follow the steps below to get an honest number.
Step 1 — Enter a monthly payment that truly fits your budget. Do not start with the payment a dealer suggests. Start with your own budget: look at your take-home pay, subtract rent, food, savings, and other obligations, and decide what is left for a car payment. A widely used guardrail is the 15% rule — keep the car payment at or below 15% of your monthly take-home pay. On $5,200 of take-home pay, that means a payment of no more than $780.
Step 2 — Enter your down payment. Include cash you will put down plus the realistic trade-in value of your current vehicle. A 20% down payment is the classic target because it keeps you from owing more than the car is worth the moment you drive off the lot. The calculator adds your down payment to the loan amount to give the maximum purchase price.
Step 3 — Enter the APR and loan term. Type the annual percentage rate you actually expect to qualify for — check your bank or credit union for a pre-approval rather than guessing — and the term in months. Shorter terms mean higher payments but far less interest; the calculator defaults to 60 months at 7% APR.
Step 4 — Click "Calculate" and read the four results. You get the loan amount your payment supports, the maximum car price (loan plus down payment), the total of all monthly payments, and the total interest you will pay. With the defaults — $500 a month, $5,000 down, 7% APR, 60 months — the loan amount is $25,251 and the maximum price is $30,251, with $30,000 in total payments and $4,749 of that being interest. Notice that nearly $5,000 of your money goes to interest alone, which is why the term and rate matter as much as the price.
Car affordability is not the sticker price — it is the total cost of ownership measured against your income. Two households buying the same $30,000 car can have very different experiences: one with a large down payment, a short loan, and cheap insurance; another with nothing down, an 84-month loan at 11% APR, and expensive full-coverage insurance. The calculator focuses on the financing math, but a sound decision weighs everything the car will cost you each month.
Financial planners commonly use the 20/4/10 rule: put at least 20% down, finance for no more than 4 years (48 months), and keep total monthly vehicle expenses — payment, insurance, fuel, and maintenance — under 10% of your gross monthly income. A simpler screen is the 15% rule: the car payment alone should not exceed 15% of monthly take-home pay. Both rules exist because lenders will happily approve you for far more car than is wise; a debt-to-income (DTI) ratio that looks fine to a lender can still leave you with no room to save.
A few more terms help. The principal is the amount you borrow; the APR is the yearly cost of borrowing expressed as a rate; the loan term is how many months you take to repay. Depreciation — the car losing value — is the silent budget killer: new cars typically lose around 20% of their value in the first year and roughly 15% per year after that, which is why small down payments leave buyers underwater (owing more than the car is worth). Negative equity from a trade-in gets rolled into the new loan and quietly inflates the price. Finally, remember the out-the-door price: sales tax, title, registration, and dealer fees commonly add 8% to 12% on top of the negotiated price, so a $30,000 sticker is really about $33,000 out the door.
The calculator inverts the standard loan payment formula. Given a payment, rate, and term, the supportable loan is the present value of the payment stream; adding the down payment gives the maximum price:
r = APR ÷ 12 (monthly interest rate)
Loan amount = Monthly payment × (1 − (1 + r)−n) ÷ r, where n = loan term in months
Maximum car price = Loan amount + Down payment
Total of payments = Monthly payment × n
Total interest = Total of payments − Loan amount
Worked example 1. Monthly payment $500, down payment $5,000, APR 7%, term 60 months. Monthly rate r = 0.07 ÷ 12 = 0.005833. Then (1.005833)60 ≈ 1.4176, so the loan factor is (1 − 1/1.4176) ÷ 0.005833 ≈ 50.50. Loan amount = $500 × 50.50 = $25,251. Maximum price = $25,251 + $5,000 = $30,251. Total of payments = $500 × 60 = $30,000, and total interest = $30,000 − $25,251 = $4,749. These match the calculator's default output exactly.
Worked example 2. Monthly payment $650, down payment $8,000, APR 6%, term 48 months. Monthly rate r = 0.06 ÷ 12 = 0.005. Then (1.005)48 ≈ 1.2705, so the factor is (1 − 1/1.2705) ÷ 0.005 ≈ 42.58. Loan amount = $650 × 42.58 = $27,677. Maximum price = $27,677 + $8,000 = $35,677. Total of payments = $650 × 48 = $31,200, and total interest = $31,200 − $27,677 = $3,523. Compare this with stretching the same $35,677 price over 72 months at 8%: the payment would drop to about $622, but total interest would balloon to roughly $9,100 — a useful reminder that a lower payment is not the same as a cheaper car.
Daniel earns $75,000 a year, or $6,250 a month before tax. Applying the 20/4/10 rule, his total monthly vehicle budget is 10% of $6,250 = $625. That $625 must cover everything, so he estimates ownership costs honestly: full-coverage insurance at $150, fuel at $130, and maintenance and repairs averaging $60 — $340 in all. That leaves $625 − $340 = $285 a month for the loan payment itself.
At 7% APR over 48 months, the loan factor is (1 − 1/1.3221) ÷ 0.005833 ≈ 41.76, so his $285 payment supports a loan of $285 × 41.76 = $11,903. With 20% down, the maximum price is $11,903 ÷ 0.80 = $14,879 — call it $14,900, with about $3,000 down. That number may feel low next to the $35,000 average new-car transaction price, but it is the price that keeps Daniel's total car spending at 10% of gross income while building equity instead of debt. His realistic options: a well-chosen used car around $15,000, or a larger down payment saved over another year to reach a higher price without breaking the rule.
Priya and Marcus earn $120,000 combined — $10,000 a month gross — and need to replace the family SUV. Their 10% total vehicle budget is $1,000 a month. Ownership costs run higher for an SUV: insurance $180, fuel $150, maintenance $70, totaling $400. That leaves $600 a month for the payment. They have $7,000 in cash plus a trade-in worth $8,000, for a total down payment of $15,000.
With good credit they qualify for 6% APR over 48 months — a factor of 42.58, as computed above. Loan amount = $600 × 42.58 = $25,548. Maximum price = $25,548 + $15,000 = $40,548, roughly $40,500. Their $15,000 down payment is 37% of the price, well above the 20% guideline, so depreciation will not push them underwater; the 48-month term keeps total interest to $600 × 48 − $25,548 = $3,252. If they instead rolled $4,000 of negative equity from the trade-in into the loan, the price they could afford would not change — the $4,000 would simply consume part of their $15,000 down payment's power, forcing them into a cheaper car or a longer term. The math rewards entering the deal with equity, not debt.
1. Budgeting the payment instead of the total cost. A $500 payment looks manageable until you add $170 of insurance, $140 of fuel, and $80 of maintenance — suddenly the car costs $890 a month, or 17% of a $5,200 take-home pay. Always budget payment plus ownership costs together, and use the 10%-of-gross rule as the ceiling for the total.
2. Stretching the term to 72 or 84 months to "afford" more car. Longer terms lower the payment but multiply the interest and keep you underwater for years: on a $35,000 loan at 8%, 84 months costs about $10,600 in interest versus $5,900 over 48 months, and the car's value falls faster than the balance for most of the loan. If you need 84 months to afford the payment, you cannot afford the car.
3. Putting little or nothing down. With 0% down, depreciation makes you underwater immediately — owing more than the car is worth. If the car is totaled or you must sell, you pay the shortfall out of pocket unless you bought gap insurance. Twenty percent down is the simplest protection against this trap.
4. Forgetting taxes and fees. Sales tax, title, registration, and dealer documentation fees typically add 8% to 12% to the negotiated price. A $30,251 maximum price from the calculator is really about $33,000 out the door at a 9% combined rate — so negotiate the out-the-door number, or shave your target price by roughly a tenth to leave room.
5. Shopping the monthly payment instead of the price — and skipping pre-approval. Dealers can hit any target payment by extending the term or inflating the price, and their financing often includes a rate markup over what the lender offered. Arrive with a pre-approved rate from your bank or credit union, negotiate the out-the-door price first, and only then discuss financing.
Once you know your price range, run the numbers on the loan itself with our Auto Loan Calculator to compare terms, rates, and total interest side by side. You can also browse all Financial Calculators for budgeting, savings, mortgage, and retirement tools.
This page provides a car affordability calculator that works backward from an affordable monthly payment to a maximum car price. Inputs: affordable monthly payment in dollars (default $500), down payment in dollars (default $5,000), APR as a percent (default 7%), and loan term in months (default 60). Outputs: supportable loan amount, maximum car price (loan plus down payment), total of monthly payments, and total interest paid. Method: monthly rate r = APR/12; loan = payment × (1 − (1+r)^-n)/r; max price = loan + down payment. Reference rules: the 20/4/10 rule (20% down, ≤48-month term, total monthly vehicle costs ≤10% of gross monthly income) and the 15% rule (payment ≤15% of monthly take-home pay). New cars depreciate roughly 20% in year one; taxes and fees add about 8–12% to the negotiated price. This is a planning estimate, not financial advice.
Sources: Consumer Financial Protection Bureau auto-loan guidance; Federal Reserve consumer credit data. This calculator is for planning only — loan offers, insurance costs, and fees vary by lender, state, and driver, so confirm figures with your lender and insurer. Last reviewed October 2026.
At 7% APR over 60 months with a $5,000 down payment, about a $30,251 car ($25,251 financed). Run your own numbers in the calculator above.
A common guideline is to keep total car costs — payment, insurance, fuel — under 15% of take-home pay, and the 20/4/10 rule: 20% down, a 4-year (or shorter) loan, and total costs under 10% of gross income.
Yes — every extra dollar down is a dollar less borrowed, so it lowers both the loan balance and the interest you pay over the term.
It lowers the monthly payment but you pay much more interest and risk owing more than the car is worth. A 60-month term is a reasonable middle ground.
Sales tax, title, registration, dealer fees, insurance and maintenance — budget for those separately, since they can add thousands to the true cost.