# Car Affordability Calculator

Find out how much car you can afford based on income, down payment, and loan terms. Uses the 15% rule for responsible car buying.

## What this calculates

Find out the maximum car price that fits your budget. Enter your take-home pay, down payment, loan rate, and term to see exactly how much car you can afford without stretching your finances too thin.

## Inputs

- **Monthly Take-Home Pay** ($) — min 0 — Your after-tax monthly income.
- **Max % of Income for Car Payment** (%) — min 1, max 50 — Financial experts recommend no more than 15% of take-home pay.
- **Down Payment** ($) — min 0 — Cash you will put down upfront.
- **Interest Rate (APR)** (%) — min 0, max 30 — Annual interest rate on the auto loan.
- **Loan Term** — options: 36 months (3 years), 48 months (4 years), 60 months (5 years), 72 months (6 years), 84 months (7 years) — Length of the auto loan.

## Outputs

- **Max Monthly Payment** — formatted as currency — The most you should spend on a car payment per month.
- **Max Loan Amount** — formatted as currency — The largest loan you can take at this payment level.
- **Max Car Price** — formatted as currency — Total car price including your down payment.
- **Total Interest Paid** — formatted as currency — Total interest over the life of the loan.
- **Total Cost** — formatted as currency — Down payment + all loan payments combined.

## Details

The 15% rule is a popular guideline for car affordability: your monthly car payment should not exceed 15% of your take-home pay. On a $4,500 monthly income, that means a maximum payment of $675. With a $5,000 down payment, 6.5% APR, and a 60-month loan, you can afford a car around $39,200.

Longer loan terms lower your monthly payment but increase total interest. A 72-month loan at 6.5% on $30,000 costs about $3,600 more in interest than a 48-month loan on the same amount. Financial advisors generally recommend keeping auto loans at 60 months or shorter to avoid being "underwater" (owing more than the car is worth).

Remember that the sticker price is not your only cost. Budget for insurance, fuel, maintenance, registration, and taxes. A common rule is that total car ownership costs run about 50% more than just the loan payment. If your max payment is $675, plan for roughly $1,000 per month in total car expenses.

## Frequently Asked Questions

**Q: What percentage of income should go to a car payment?**

A: Most financial experts recommend spending no more than 10-15% of your monthly take-home pay on a car payment. The 15% rule is a good starting point. If you have other significant debts like student loans, aim closer to 10%. Total transportation costs (payment, insurance, gas, maintenance) should stay under 20% of take-home pay.

**Q: Is a 72-month car loan a bad idea?**

A: A 72-month loan lowers your monthly payment but costs significantly more in interest and increases the risk of being underwater on the loan. Cars depreciate fastest in the first 3 years, and a 6-year loan means you could owe more than the car is worth for most of the loan. Stick to 60 months or less if you can.

**Q: How much should I put down on a car?**

A: A 20% down payment is ideal for new cars, and 10% for used cars. Putting more down reduces your loan amount, lowers monthly payments, and helps you avoid negative equity. If you cannot put down at least 10%, consider a less expensive vehicle or saving up before buying.

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Source: https://vastcalc.com/calculators/finance/car-affordability
Category: Finance
Last updated: 2026-04-08