Car Affordability Calculator
Max car price = (monthly budget × loan factor) using 20/4/10 rule and DTI cap.
Result
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How to use this calculator
- Enter monthly take-home (after taxes).
- Set auto budget %.
- Enter expected APR + loan term.
- Read max sticker price.
About this calculator
The 20/4/10 rule: 20% down, 4-year max loan, 10% of take-home for all auto costs (loan + insurance + fuel + maintenance). This calculator backs into a max sticker price from your monthly budget. The biggest mistake first-time car buyers make: focusing only on monthly payment and stretching loans to 7-8 years to "afford" a more expensive car — costs more long-term and traps you underwater for years.
Frequently asked
Why 10%?+
Average household. 15% is OK if minimal other debt. 20%+ usually means you're house-poor or commuting too much.
Should I count insurance/fuel?+
Yes — total cost of ownership matters. A $35k pickup costs more in insurance and gas than a $35k Civic.
Is 84-month loan ever OK?+
Almost never. Cars depreciate 50% in 3-4 years. 84-month puts you underwater for ~5 years.
Should I buy used?+
2-3 year old cars have already taken depreciation hit. Often 30-50% cheaper than new for same model. Sweet spot.
Pay cash if possible?+
Mathematically not always — at sub-5% APR you might invest the cash for higher returns. But emotionally, debt-free feels great.
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