Car Affordability Calculator
Work back from a comfortable monthly payment to the car price you can afford.
How to use the Car Affordability Calculator
- Enter the monthly payment you are comfortable with.
- Enter the loan rate and term in months.
- Add any down payment you can make.
- See the car price that fits your budget.
Loan = Payment × ((1+r)^n − 1) ÷ (r × (1+r)^n); price = loan + down payment
About the Car Affordability Calculator
Most people shop for a car by its sticker price, but the number that actually governs affordability is the monthly payment. This calculator flips the usual loan maths around: you tell it the payment you are comfortable with, the rate, the term and any down payment, and it works back to the car price that fits. It is the difference between hoping a car is affordable and knowing the ceiling before you walk onto the lot.
Seeing it this way makes the levers obvious. A longer term or a bigger down payment raises the price you can reach for the same monthly payment — but stretching the term also means paying interest for longer, so a car you can "afford" over seven years can cost far more in total than one over four. The payment fits either way; the lifetime cost does not.
The price shown covers the vehicle financed by the loan; it deliberately leaves out sales tax, registration, insurance and running costs, which are real and can be substantial. A common guide is to keep all car costs under 15–20% of take-home pay. To price the loan on a specific car, use the car loan calculator, and to compare leasing, the auto lease calculator.
Frequently asked questions
Does a longer loan let me afford more car?
For the same monthly payment, yes — a longer term supports a higher price. But you pay interest for longer, so the total cost rises. A cheaper car over a shorter term is often the better deal.
Does the price include tax and insurance?
No. It is the price the loan covers. Sales tax, registration, insurance and running costs are extra and can be significant, so budget for them separately.
How much of my income should a car cost?
A common guideline is to keep total car costs — payment, insurance, fuel and upkeep — under about 15–20% of your take-home pay. Adjust for your priorities and other commitments.