Find the most you should pay for a car from your income or from the monthly payment you’re comfortable with, including your down payment, trade-in, sales tax and fees. Checks the result against the 20/4/10 rule.
The same payment over different loan terms
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Updated 24 October 2026. Results are estimates for information only, not financial, tax, legal or investment advice. Actual rates, fees, taxes and rules vary. How our calculators work
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How to use the Car Affordability Calculator
- Choose whether to start from your income (the 20/4/10 rule’s 10% budget) or from a monthly payment you already have in mind.
- Enter your down payment, any trade-in value and what you still owe on it, the loan’s APR and term, your sales tax rate and fees.
- Read the highest car price that fits, the loan amount and the monthly payment. The table shows the same budget over shorter and longer loans.
About this tool
The question at the dealership is usually “what monthly payment do you want?”, which is the easiest way to end up overpaying: stretch the loan to 72 or 84 months and almost any car fits the payment. This calculator works the other way round. It starts from what your budget can carry and tells you the car price that fits, after your down payment, trade-in, sales tax and fees.
The 20/4/10 rule is a common guideline for keeping a car affordable: put at least 20% down, finance for no more than 4 years, and keep total car costs (the payment plus insurance and fuel) under 10% of your gross monthly income. It is a rule of thumb, not a law of nature. In a high-cost area or with a long commute it can be tight, and some advisers use a 15% limit. The calculator shows whether your numbers pass each part.
How the price is worked out: the monthly payment you can afford sets the largest loan, using the standard amortization formula at your APR and term. The car price is then the loan plus your down payment plus your trade-in equity, minus fees, with sales tax taken out. Most states charge sales tax only on the price minus your trade-in value; leave that box ticked unless yours taxes the full price. When you’ve chosen a car, check how fast extra payments could clear the loan with the car loan payoff calculator.
Frequently asked questions
How much car can I afford on a $60,000 salary?
Under the 20/4/10 rule, total car costs should stay under 10% of $5,000 a month, so $500. If insurance and fuel take $200, that leaves a $300 payment. Over 48 months at 7% APR that supports a loan of about $12,500, so with 20% down a car of about $15,700, or closer to $14,600 once 6% sales tax is paid too. Enter your own figures above for an exact answer.
What is the 20/4/10 rule for buying a car?
Put at least 20% down, finance for no more than 4 years, and keep monthly car costs (payment, insurance and fuel) under 10% of your gross monthly income. It keeps you from owing more than the car is worth and leaves room in your budget.
Is a 72- or 84-month car loan a bad idea?
It lowers the payment but costs more interest, and because cars lose value fastest in the first years, you can owe more than the car is worth for a long time. That is a problem if you need to sell it or it is written off. Compare the 48- and 72-month rows in the table above.
Does my trade-in reduce the sales tax?
In most US states, yes: sales tax is charged on the price minus the trade-in value. A few states tax the full price. Untick the box if yours does.
What if I still owe money on my trade-in?
Enter what you owe. Only the equity (trade-in value minus the payoff) helps. If you owe more than it’s worth, the difference is added to your new loan, which reduces the car price you can afford.
Should I include insurance in the budget?
Yes, if you use the 10% rule. Insurance and fuel are part of what the car costs you each month. Get an insurance quote for the specific model before you buy, because it varies a lot between cars.