How Much Car Can I Afford?
Enter your income and loan terms to see the maximum car price under two classic rules — side by side, with the monthly payment each one allows.
20/4/10 rule
$36,320
Max car price with $750.00/mo (10% of gross monthly) on a 48-month loan at 7% APR.
Your $5,000 down is below the rule's 20% guideline — a bigger down payment or cheaper car closes the gap.
15% of take-home rule · income estimated
$47,611
Max car price with $843.75/mo (15% of take-home) on a 60-month loan at 7% APR.
One rule needed an income figure you didn't enter, so it was estimated at 75% of gross reaching take-home — a rough average, not your taxes. Enter the other income figure for exact numbers.
How the math works
Both rules solve the same equation: max price = your cash (down payment + trade-in) + the biggest loan whose payment fits the rule's cap. The loan payment uses standard amortization at the APR you enter.
- 20/4/10 rule: 20% down, a 48-month maximum term, and a payment cap of 10% of gross monthly income. The calculator checks your cash against the 20% guideline and always uses 48 months for this card, per the rule.
- 15% of take-home: payment capped at 15% of monthly take-home pay, using the loan term you enter. Simpler, but looser on long terms.
- One income entered, both rules shown: if you enter gross income, take-home is estimated at 75% of gross for the 15% rule (and vice versa). That's a rough average tax bite, not your taxes — labeled “estimated” wherever it's used.
- Not modeled: sales tax and dealer fees (vary by state), insurance, fuel, and maintenance — budget those on top of the payment.
Common questions
What is the 20/4/10 rule for buying a car?
Put at least 20% down, finance for no more than 4 years (48 months), and keep the monthly payment at or below 10% of your gross monthly income. It's the conservative rule — it keeps you from being underwater on the loan and limits total interest.
What is the 15% rule for car affordability?
Keep your total monthly car payment under 15% of your take-home pay. It's simpler than 20/4/10 and works directly from the paycheck number you know, but it's looser — on a long loan term it can still approve an expensive car.
Should I include insurance and gas in the 10% or 15%?
Strictly, both rules cap the loan payment only — insurance, fuel, and maintenance are extra. A safer budget keeps the payment plus insurance under the cap. This calculator models the payment; add your insurance quote on top when you shop.
Does a bigger down payment let me afford a more expensive car?
Yes, dollar for dollar in this math: every extra $1,000 down raises the affordable price by $1,000 at the same monthly payment. It also helps you meet the 20/4/10 rule's 20% down guideline, which protects you from owing more than the car is worth.