How to use this calculator
Choose what you want to start from.
My income works out the payment you can afford, then the car price:
- Enter your annual gross income and your other monthly debt payments: rent or mortgage, student loans, credit card minimums and other loans.
- Pick a budget rule. The 20/4/10 rule fixes the down payment at 20% and the loan at 48 months. The take-home rule lets you choose the share of your take-home pay and your own loan terms.
- Set a maximum debt-to-income ratio. The payment is capped so that all your debts, including the car, stay under it.
Monthly payment skips the income step. Enter the payment you have in mind, and the calculator works out the price it buys.
In both modes you set the interest rate, sales tax, fees and your running costs (insurance, fuel and maintenance). Sales tax and fees are added to the loan, and a trade-in reduces the taxable price, as in most states.
How the calculation works
The most you can borrow for a given payment is the present value of the payments, where r is the APR ÷ 12 and n is the number of months:
That loan has to cover the price plus sales tax and fees, minus your down payment and trade-in. Solving for the price, with t as the sales tax rate:
Under the 20/4/10 rule, the down payment is 20% of the price, so the denominator becomes 0.8 + t.
Worked example: the 20/4/10 rule
You earn $75,000 a year and pay $1,500 a month toward rent and other debts. Insurance is $180 a month, the loan rate is 7%, sales tax is 6% and fees are $800.
- Gross monthly income: $75,000 ÷ 12 = $6,250
- 10% of that for payment and insurance: $625, minus $180 insurance = $445 for the payment
- Debt-to-income check at 36%: $2,250 − $1,500 = $750, so the 20/4/10 rule is the tighter limit
- A $445 payment for 48 months at 7% supports a loan of $18,583
- Car price: ($18,583 − $800) ÷ (0.8 + 0.06) ≈ $20,678, with $4,136 (20%) down
Over the four years, the loan costs $2,777 in interest. Add $180 of insurance, $150 of fuel and $75 of maintenance a month, and the car costs about $850 a month and $44,935 over the four years, price and tax included.
If you use the take-home rule instead, with 15% of $4,800 take-home pay over 60 months and $4,000 down, the payment rises to $540 and the price to about $28,746.
What a monthly payment buys
At 7% APR, with $4,000 down, a 6% sales tax and $800 of fees in the loan:
| Monthly payment | 48 months | 60 months | 72 months |
|---|---|---|---|
| $300 | $14,837 | $17,311 | $19,619 |
| $400 | $18,777 | $22,076 | $25,152 |
| $500 | $22,717 | $26,840 | $30,686 |
| $600 | $26,656 | $31,604 | $36,219 |
| $700 | $30,596 | $36,369 | $41,752 |
| $800 | $34,536 | $41,133 | $47,286 |
Each extra year of loan buys about $4,000 more car at $500 a month, but the interest climbs quickly. On the $26,840 car over 60 months, interest comes to $4,749.
The 20/4/10 rule by income
With no other debts holding you back, $180 of insurance, 7% APR, 6% sales tax and $800 of fees:
| Annual income | Payment allowed | Car price | 20% down |
|---|---|---|---|
| $50,000 | $236.66 | $10,561 | $2,112 |
| $75,000 | $445.00 | $20,678 | $4,136 |
| $100,000 | $653.33 | $30,794 | $6,159 |
| $150,000 | $1,070.00 | $51,027 | $10,205 |
Insurance takes a bigger bite out of a smaller budget, which is why the $50,000 row buys less than half of the $100,000 one.
Interpreting your result
- Treat the result as a ceiling. It’s the most the rule allows, not a target.
- Watch the debt-to-income limit. If it’s the tighter of the two limits, the calculator tells you. Our debt-to-income ratio calculator shows your full picture.
- Use real numbers. Get an insurance quote for the model you want, and estimate fuel with the gas cost calculator. Your take-home pay is on your pay stub or in the paycheck calculator.
- Compare loan terms. The CFPB points out that a longer loan means smaller payments but more interest over the life of the loan, and that longer loans are more likely to leave you owing more than the car is worth.
Once you have a price, the auto loan calculator shows the full loan, and the car lease calculator shows what leasing the same car would cost.
Assumptions and limitations
Sales tax is charged on the price minus the trade-in, and tax and fees are added to the loan. Interest accrues monthly at APR ÷ 12. The calculator doesn’t include registration renewals, parking, tolls, or depreciation, and it treats your running costs as fixed for the whole loan. The 20/4/10 rule and the take-home share are rules of thumb; lenders decide based on your credit, income and debts.
Sources
- Consumer Financial Protection Bureau, How do I compare auto loan offers?
- Consumer Financial Protection Bureau, What is a debt-to-income ratio?
This calculator gives estimates for general information. Your lender’s offer and your own budget decide what’s affordable for you.
Frequently asked questions
How much car can I afford on my salary?
Under the 20/4/10 rule, your car payment and insurance should stay within 10% of your gross monthly income, with 20% down and a loan of no more than four years. On a $75,000 salary that leaves $625 a month; after $180 of insurance, a $445 payment at 7% buys a car of about $20,678 with sales tax and fees included in the loan.
What is the 20/4/10 rule for buying a car?
It's a rule of thumb, not a lender requirement. Put at least 20% down, finance for no more than 4 years, and keep transportation costs within 10% of your gross income. Versions differ on what counts toward the 10%. This calculator counts the loan payment and insurance, and shows fuel and maintenance separately.
What monthly car payment can I afford?
Start from what's left after your other bills and savings, not from what a lender will approve. Lenders look at your debt-to-income ratio, which the CFPB defines as all your monthly debt payments divided by your gross monthly income. The calculator caps the car payment so your total debts stay within the ratio you choose.
How much car does a $500 payment buy?
At 7% APR with $4,000 down, a 6% sales tax and $800 of fees rolled into the loan, $500 a month buys a car of about $22,717 over 48 months, $26,840 over 60 months or $30,686 over 72 months. The longer loans buy more car, but at a cost of much more interest.
Should I include insurance and gas in my car budget?
Yes. They're part of what the car costs you each month. In our 20/4/10 example the $445 loan payment is only about half of the $850 monthly cost once insurance, fuel and maintenance are added.
Is a longer car loan a good way to afford a nicer car?
It lowers the payment, but you pay more interest and are more likely to owe more than the car is worth. The CFPB notes that some financial experts recommend auto loans of five years or less. If a car only fits your budget at 72 or 84 months, it's worth looking at a less expensive one.
Updated November 2026. Results are estimates for educational purposes and depend on the inputs you provide.