Work backward from a payment and cash budget. Preview terms, then review the assumptions behind the supported price.
Your numbers
$
Before taxes, per month.
$
The most you want to pay each month.
$
Loan payment plus your insurance, fuel, maintenance and registration estimates.
$
$
Market value before subtracting any loan payoff.
$
Turn off if your state taxes the full selling price.
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%
$
Include required debt payments that continue after this purchase, such as a mortgage, student loans and credit cards.
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Doc fee, destination, title & registration rolled into the loan.
$
Costs paid outside the loan still count in out-the-door cost.
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$
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Result
Approximate sticker ceiling—Enter your income and target payment.
Max loan—
Resulting payment—
Total interest—
Out-the-door—
Payment / income—
All-in auto / income—
Down payment—
+ Trade-in equity—
Amount financed—
Vehicle price—
+ Sales tax—
+ Fees paid or financed—
Upfront cash including cash-paid fees
Vehicle out-the-door cost—
Debt-to-Income
—
After this car payment
20/4/10 Rule
20% down≤4 yr≤10% income
Against this price
Approximate sticker ceiling—The conservative ceiling from your income.
—20% down — put at least a fifth down
—4-year term — finance for ≤48 months
—10% of income — total car cost (payment + insurance + fuel)
The sticker price is only the beginning
This view shows the loan payment and estimated monthly operating costs. Estimating the economic cost of ownership also requires an ownership period and an expected resale value.
Check your take-home cash budget
Other monthly debt is counted once from Your numbers. This is cash flow after tax, separate from gross-income DTI.
Purchase receipt
Approximate sticker ceiling
Vehicle out-the-door cost
Amount financed
Upfront cash
Monthly vehicle cash outflow
Unused trade proceeds
Continuous monthly note-rate estimate, with unrounded internal payments. Displayed cents may differ from a lender’s posted schedule. A financing ceiling is not approval or a spending recommendation.
Calculations stay on this page. Save on this device only when you choose.
A previous saved scenario is available. Review it before applying; its original stored bytes have been retained.
Preview the term trade-off
Selecting a row previews it. Apply changes only the loan term; a longer term is never selected automatically.
Approximate sticker ceiling
Lifetime interest
How the price is solved
Price + modeled tax + financed fees + trade payoff − trade value − cash actually applied + surplus trade proceeds = loan. Available down-payment cash is a limit, not an amount always spent. Cash-paid fees add once to upfront cash. When selected, tax credit uses eligible gross trade value, not net equity.
4 min read5 steps5 terms3 examples6 FAQsmaxLoan = PMT × (1 − (1 + r)^−n) / r
The payment view solves a financing ceiling, not lender approval or a take-home budget.
By Payment works backward from your loan-payment cap. The 20/4/10 Rule applies explicit gross-income, down-payment and four-year assumptions. Enter a quoted or assumed annual note rate, term, cash down, gross trade value, trade payoff, tax and fees.
2
Separate the loan payment from vehicle cash costs
Enter insurance, fuel, maintenance and registration estimates. An optional monthly vehicle-cost cap includes those costs and the loan payment. Cash-paid fees belong to upfront cash; financed fees enter the loan. Select the gross-trade tax credit only when it applies to your purchase.
3
Check take-home cash in Total Cost
Total Cost retains your selected calculation basis. Enable the additional cash budget and enter take-home income, living costs and an emergency or savings buffer. Other monthly debt is counted once. Gross-income DTI is separate from this cash budget.
4
Preview a term before applying it
Compare sticker price, payment, upfront cash and lifetime interest at the displayed terms. Set your comparison term limit and optionally enter another quoted rate. Excluded terms stay marked. Selecting a radio row previews it; Apply changes the term only after your choice.
5
Review the receipt, then save or export
Read the binding constraint and the price, out-the-door cost, loan and upfront cash together. Copy, CSV and Print use the selected result. Default Share copies a price summary with a clean calculator link. A detailed link includes private assumptions only after explicit selection. Save on this device is an explicit action. Old records remain available for review without silent numeric rescaling.
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Reference
Formula & Methodology
4 formulas▸
Maximum loan from a target payment
maxLoan = PMT × (1 − (1 + r)^−n) / r
PMT is the chosen monthly loan payment, r is the annual note rate divided by 1,200, and n is the number of months. This is the present value of an annuity. At a zero note rate, loan capacity is PMT × n. A fee-inclusive APR is not substituted for the note rate.
Gross trade value and payoff are separate. The purchase identity uses cash actually applied, with surplus trade proceeds returned separately; available down-payment cash is a limit, not an amount always spent. Eligible trade tax credit uses gross value, not net equity. Cash-paid fees add once to upfront cash and out-the-door cost. With no trade and tax on the full sticker price, sticker = (loan + cash applied − financed fees) / (1 + tax rate as a decimal). With no tax, the denominator is 1.
The 36% DTI check is an illustrative assumption; lender limits vary. DTI uses required debt payments and gross income. Insurance, fuel, maintenance and registration belong in vehicle cash flow. The 20/4/10 heuristic uses gross income; its used-car option changes cash down from 20% to 10%. It does not guarantee positive equity.
The 20/4/10 rule
down >= 20% (new) or 10% (used); term <= 48 mo; (payment + insurance + fuel + maintenance + registration) <= 10% income
A conservative guideline: put at least 20% down on a new car or 10% down on a used car, finance for no more than 4 years, and keep total monthly vehicle costs under 10% of gross monthly income. This calculator uses your insurance, fuel or charging, maintenance, and registration estimates for the 10% check.
Reviewer: Calculover Editorial Review - Source and limitation review
Last reviewed: 2026-06-14
Last verified: 2026-06-14
Data effective: 2026-06-14
Methodology
The payment view solves a financing ceiling, not lender approval or a take-home budget. A positive payment can be modeled without income; income ratios then remain unavailable. Zero payment allows a cash-only purchase. Gross trade value and payoff are separate. The purchase identity uses cash actually applied, with surplus trade proceeds returned separately; available down-payment cash is a limit, not an amount always spent. Eligible trade tax credit uses gross value, not net equity. Cash-paid fees add once to upfront cash and out-the-door cost.
Assumption: The payment view solves a financing ceiling, not lender approval or a take-home budget. A positive payment can be modeled without income; income ratios then remain unavailable. Zero payment allows a cash-only purchase.
Assumption: The model uses the annual note rate and regular monthly payments. A disclosed APR may include financing charges. Actual daily accrual, payment dates and lender charges can change the lender's figures.
Assumption: The 20/4/10 rule's 10% check uses the ownership-cost estimates entered on the page for insurance, fuel or charging, maintenance, and registration; your actual running costs vary by vehicle, location, and driving habits.
Limitations & guidance
The 36% DTI check is an illustrative assumption; lender limits vary. DTI uses required debt payments and gross income. Insurance, fuel, maintenance and registration belong in vehicle cash flow. The 20/4/10 heuristic uses gross income; its used-car option changes cash down from 20% to 10%. It does not guarantee positive equity.
The maximum-price figure is a planning estimate and does not guarantee approval; it does not quote vehicle-specific insurance, repairs, depreciation, dealer add-ons, GAP insurance, service contracts, or extended warranties.
Professional guidance: The Car Affordability Calculator is for educational purposes only and is not financial, credit, tax, or legal advice. It produces an estimate; lenders price loans using your full credit profile. Confirm rates, terms, and eligibility with your lender, and budget for insurance, fuel, and maintenance before buying.
Note rate ↗Contractual annual interest rate divided by 1,200 gives the monthly rate. A quoted APR may already include fees and is not interchangeable with the note rate.
DTI (Debt-to-Income) ↗A financing ceiling is not approval or a spending recommendation. Debt ratios use gross income; operating costs belong in cash flow. The chosen percentage is only a budgeting assumption.
20/4/10 rule ↗A budgeting guideline for car buyers: 20% down on a new car or 10% down on a used car, a loan term of 4 years or less, and total monthly vehicle costs no greater than 10% of gross monthly income.
Negative equity ↗When you owe more on your current car than it's worth. Rolling that shortfall into a new loan increases the amount financed and reduces how much new car you can afford.
TCO (Total Cost of Ownership) ↗The economic cost over a chosen ownership period is the vehicle price less resale value, plus interest, taxes, fees and running costs. The monthly cash budget includes loan payments, so adding depreciation to it would count part of the purchase twice.
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Scenarios
Real-World Examples
3 worked examples▸
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Budget-driven buyer
$400/mo, $4k down, 7% for 60 months
Monthly income $5,000Target payment $400Down payment $4,000Note rate / term 7% / 60 moCalculation basis By Payment; no extra capsSales tax 6%Gross trade value / payoff $0 / $0Financed fees / cash-paid fees $0 / $0Monthly insurance / fuel / maintenance / registration $135 / $115 / $0 / $0Other monthly debt $0
Loan: $20,200.80; Sticker price: $22,830.94; Out-the-door cost: $24,200.80. A financing ceiling is not approval or a spending recommendation. Debt ratios use gross income; operating costs belong in cash flow. The chosen percentage is only a budgeting assumption.
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Disciplined saver
20/4/10 conservative ceiling
Monthly income $6,500Down payment $6,000Note rate / term 6% / 48 moOther debts $250Calculation basis 20/4/10 for a new car; no extra capsSales tax 6%Gross trade value / payoff $0 / $0Financed fees / cash-paid fees $0 / $0Monthly insurance / fuel / maintenance / registration $135 / $115 / $0 / $0
Loan: $17,032.13; Sticker price: $21,728.42; Out-the-door cost: $23,032.13. A financing ceiling is not approval or a spending recommendation. Debt ratios use gross income; operating costs belong in cash flow. The chosen percentage is only a budgeting assumption.
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First-time buyer, tight budget
$250/mo, $1.5k down, 11% annual note rate
Monthly income $3,200Target payment $250Down payment $1,500Note rate / term 11% / 60 moCalculation basis By Payment; no extra capsSales tax 6%Gross trade value / payoff $0 / $0Financed fees / cash-paid fees $0 / $0Monthly insurance / fuel / maintenance / registration $135 / $115 / $0 / $0Other monthly debt $0
Loan: $11,498.26; Sticker price: $12,262.51; Out-the-door cost: $12,998.26. A financing ceiling is not approval or a spending recommendation. Debt ratios use gross income; operating costs belong in cash flow. The chosen percentage is only a budgeting assumption.
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Reference
Cite This Calculator
APA & MLA▸
Use either format to cite this calculator in a paper, report, or resource list.
The payment view solves a financing ceiling, not lender approval or a take-home budget. A positive payment can be modeled without income; income ratios then remain unavailable. Zero payment allows a cash-only purchase.
Calculation scope
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The payment view solves a financing ceiling, not lender approval or a take-home budget. A positive payment can be modeled without income; income ratios then remain unavailable. Zero payment allows a cash-only purchase.
Cash ledger
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Gross trade value and payoff are separate. The purchase identity uses cash actually applied, with surplus trade proceeds returned separately; available down-payment cash is a limit, not an amount always spent. Eligible trade tax credit uses gross value, not net equity. Cash-paid fees add once to upfront cash and out-the-door cost.
Assumptions and limits
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The 36% DTI check is an illustrative assumption; lender limits vary. DTI uses required debt payments and gross income. Insurance, fuel, maintenance and registration belong in vehicle cash flow. The 20/4/10 heuristic uses gross income; its used-car option changes cash down from 20% to 10%. It does not guarantee positive equity.
Reading the comparison
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Gross trade value and payoff are separate. The purchase identity uses cash actually applied, with surplus trade proceeds returned separately; available down-payment cash is a limit, not an amount always spent. Eligible trade tax credit uses gross value, not net equity. Cash-paid fees add once to upfront cash and out-the-door cost. The 36% DTI check is an illustrative assumption; lender limits vary. DTI uses required debt payments and gross income. Insurance, fuel, maintenance and registration belong in vehicle cash flow. The 20/4/10 heuristic uses gross income; its used-car option changes cash down from 20% to 10%. It does not guarantee positive equity.
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Questions
Frequently Asked Questions
6 questions▸
How much car can I afford on a given salary?+
Salary alone does not establish an affordable price. This calculator estimates a financing ceiling from the entered payment, tax, trade and fee assumptions. Gross-income ratios do not subtract tax or living costs. Use the optional take-home budget to test cash remaining, and treat the result as an estimate rather than approval or a spending recommendation.
What does the 20/4/10 rule mean here?+
The chosen rule uses 20% cash down for a new car or 10% for the used-car option, a term no longer than 48 months, and total monthly vehicle costs no greater than 10% of gross monthly income. These are displayed planning assumptions. Lenders use their own criteria; the rule does not establish a universal approval limit. The monthly cost includes the loan payment, insurance, fuel or charging, maintenance and registration.
Does a longer term make the car cheaper?+
A longer term can support a higher sticker price at the same payment. That is borrowing capacity, not a lower purchase cost. Compare lifetime interest, payment and upfront cash in the term table. A zero-rate loan has zero modeled interest. Previewing a term never applies it automatically.
How are trade-in value, payoff, tax and fees handled?+
Gross trade value and the loan payoff are separate. Payoff above value adds negative equity to financing. When the selected credit applies, tax uses the positive purchase price less eligible gross trade value, with a zero floor; it does not use net equity as the credit. Cash-paid fees increase upfront cash and out-the-door cost, while financed fees enter the loan. Confirm the actual tax treatment with the relevant authority or transaction documents.
Can I enter a zero payment for a cash-only purchase?+
Yes. Available cash and trade equity can support a price with no loan payment. The receipt shows a zero loan and zero modeled loan interest. If debt payoff, financed fees or operating costs exceed the selected cash assumptions, the calculator shows no feasible price or a shortfall rather than keeping an older result.
How do saving and sharing protect my budget figures?+
Ordinary calculations do not save or rewrite a financial URL. Save this scenario on this device creates a local record only when selected. Default Share copies the selected price summary with a clean link that opens a new calculator; it does not reconstruct the private scenario. A separate reviewed choice creates a detailed link containing income, debt and take-home budget so the full assumptions can be restored. Anyone with that detailed link can read its numbers. Previous stored numeric records are retained for deliberate review.
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Save & share
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