Car Affordability Calculator
Work out how much car you can afford from a monthly budget or your income.
Please note: Estimates for planning only. Real fuel economy, depreciation, insurance and lease terms vary widely by vehicle, region and driving style. Confirm figures against a dealer quote or your own records before relying on them.
What the Car Affordability Calculator does
Affordability works backwards from what you can pay each month. Inverting the loan formula gives the largest principal that payment supports, and adding your deposit gives the vehicle price. The 20/4/10 rule then sanity-checks the result against your income.
Formula
Max loan = Payment × (1 − (1 + r)^−n) ÷ rCar price = (Max loan + Down + Trade-in) ÷ (1 + Sales tax)20/4/10: 20% down, 4 year term, 10% of gross income on all transport
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Start from | one of 2 options | Yes | — |
| Monthly payment budget | selected currency | In some modes | Accepts more than 0. Shown Start from is A monthly payment budget. |
| Gross monthly income | selected currency | In some modes | Accepts more than 0. Shown Start from is My income, using the 20/4/10 rule. |
| Share of income for all car costs | % | In some modes | The 20/4/10 rule caps total transport spending at 10% of gross income. Shown Start from is My income, using the 20/4/10 rule. |
| Insurance, fuel and upkeep per month | selected currency | Optional | Accepts 0 or more. Shown Start from is My income, using the 20/4/10 rule. |
| Down payment | selected currency | Optional | Accepts 0 or more. |
| Trade-in value | selected currency | Optional | Accepts 0 or more. |
| Loan APR | % | Yes | — |
| Loan term | months | Yes | Accepts 1 or more. |
| Sales tax | % | Optional | — |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Start from and Currency.
- Enter Loan APR and Loan term.
- Fill in the remaining inputs the form shows for your choice.
- Optionally add Down payment, Trade-in value and Sales tax.
- Select Calculate.
Worked example
A $500 monthly budget, $5,000 down, 6% APR over 60 months.
- Budget
- $500
- Down
- $5,000
- APR
- 6%
- Term
- 60
$500 supports a $25,863 loan, so with the deposit you can afford about $30,863. Interest over the term is $4,137.
Reading the result
- "Down payment as a share of price" and "term guidance" check the computed affordability against the same 20/4/10 benchmark from two angles — reading both shows whether the resulting car price actually satisfies the rule the tool is checking against, not just the raw inputs.
- The sensitivity table shows the trade-off the notes describe directly: a longer term buys a pricier car for the same payment, with "total interest" right alongside showing what that costs.
Assumptions and limitations
- This computes the loan-affordable price only — the notes state insurance, fuel, tax and maintenance are separate, so "car price you can afford" is not a full household-budget check on its own.
Common mistakes
- Treating "car price you can afford" as a target rather than a ceiling — stretching the term simply to reach a higher number, which the notes and FAQ both warn against.
- Comparing this loan-only figure against a total transport budget without adding "other car costs" back in, understating the real monthly commitment a car at this price requires.
Frequently asked questions
What is the 20/4/10 rule?
Put 20% down, finance for no more than 4 years, and keep all transport costs — payment, insurance, fuel, maintenance — under 10% of gross income.
Should I take a 7 year loan to afford more car?
Rarely. It raises total interest sharply and keeps you underwater for years, since the car depreciates faster than the loan amortises early on.