Buying a car can be anything from exciting to just meeting a need. However, the financial impact lasts long after the new-car smell fades. Before settling on a price, it’s important to know how much you can truly afford. Our How Much Car Can I Afford Calculator helps you estimate an affordable car price based on interest rate, loan term, credit score, and your chosen monthly payment.

How Much Car Can I Afford Calculator

Estimate the vehicle price you can afford based on your target monthly payment, loan term, credit tier, down payment, and trade-in.

Enter Your Auto Loan Details

Adjust the payment, term, and credit tier. The calculator auto-estimates APR based on your selections.

New

Used

Desired monthly payment ($)

This is your target payment for principal + interest only.

Down payment ($)

Cash paid up front reduces your financed amount.

Desired loan term 24 months 36 months 48 months 60 months 72 months 84 months

Longer terms can lower payments, but often increase total interest.

Credit rating Excellent (740+) Good (670–739) Fair (580–669) Poor (below 580)

Used to estimate APR. Your actual rate depends on your lender and credit profile.

Trade-in value ($)

Trade-in reduces the net amount you need to finance.

Amount owed on trade ($)

If you owe money, it may be rolled into the new loan and reduce buying power.

Estimated APR

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This is a typical APR based on your credit tier and whether the vehicle is new or used. Your actual rate may be higher or lower, which can change your payment and total interest.

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Estimates are informational and assume stable inputs. Your actual terms depend on lender, credit score, vehicle, and market conditions.

Results

Your estimate is based on your selected payment, term, and an auto-estimated APR.

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If you plan to finance sales tax and fees, your loan amount may be higher than this estimate. Taxes and fees vary by state, locality, dealer, and transaction details, and a higher financed amount can increase total interest and the total cost of the loan.

This calculator estimates interest rate from your selected credit tier and vehicle type (new vs. used). Your actual APR may be higher or lower, which can change your payment breakdown, total interest, and total of payments.

Loan summary

Estimated total financed

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Estimated total interest

$—

Estimated total of payments

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This estimate focuses on the loan math (principal + interest). Taxes, fees, and add-ons can affect your out-the-door price and your financed amount.

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A Simple Rule of Thumb for Car Affordability

So, how do you know how much you can or should spend on a vehicle? A common rule of thumb many financial experts talk about is the 20/4/10 guideline.

Here’s how it works:

• Put 20% down payment to reduce the loan amount
• Choose a 4-year loan term (48 months or less) to limit interest costs
• Spend no more than 10% of monthly take-home pay for total transportation costs

This isn’t a hard rule, but it’s a helpful starting point. If your monthly car payment, insurance, and fuel are eating up more than 10% of your monthly take-home pay after taxes, the car itself, may feel affordable, but when you factor in the rest, it can cause unnecessary stress.

What Actually Determines the Car You Can Afford?

(And how this calculator works)

The how much car can I afford calculator works by balancing several moving parts. Understanding the calculator inputs can give you a better sense of how much you can spend.

1. Start with your credit score and interest rate.

Your credit score strongly influences the interest rate you’ll qualify for. Higher scores typically unlock lower rates, while fair or poor credit often comes with higher interest rates. Even a 1% or 2% difference in APR can add thousands to the total cost of a car loan. This calculator automatically estimates your APR based on your credit tier and whether the vehicle is new or used, giving you a realistic starting point rather than an overly optimistic guess.

2. Choose a loan term that matches your goals.

Next, select a loan term. Longer terms can lower your monthly car payment, but they usually increase the total interest paid. Shorter terms raise the payment but help you pay off the loan faster and reduce your overall borrowing costs. Adjust the term length to see how time affects both affordability and your total cost.

3. Set a preferred monthly payment.

This is the most important input. Your preferred monthly payment should be an amount you can handle comfortably month after month without cutting into your budget or other priorities. The calculator works backward from this number to estimate the car purchase price that fits your budget.

4. Factor in down payment, trade-in, and any amount owed.

A larger down payment or trade-in value amount reduces how much you need to finance. However, if you still owe money on your current vehicle, that balance increases the loan amount and can lower what you can afford. Entering all three shows the true net effect on your buying power.

5. Keep real-world costs in mind.

Sales tax, registration, and dealer fees will increase the total cost of a car. If you choose to finance those costs, they increase both your loan balance and your total interest due. Leave yourself some breathing room when selecting your payment limit to account for these additional costs.

Together, your inputs will help you see not just how much a lender might approve, but what actually makes sense for your financial situation.

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FAQs

How Much Car Can I Afford Based on My Income?

A standard guideline is to keep your monthly car payment between 10% and 15% of your monthly take-home pay. While this guideline stretches the 20/4/10 rule, it truly shows that these numbers are just recommendations. However, these ranges help make sure your car loan fits your budget without crowding out essentials, such as housing, savings, or groceries.

Should I Focus on Monthly Payment or Total Car Price?

The best solution is to choose an affordable monthly car payment first, then determine if the total loan amount and interest costs fit into your overall financial plan. For example, start with the monthly payment. The payment determines whether the car fits your monthly budget, meaning you’ll be able to make the payments on time and consistently. However, focusing only on the payment amount can hide higher interest costs or a longer loan term, which costs you more in the long run and could result in an upside-down car/loan situation later.