Car Affordability Calculator
Calculate maximum vehicle purchase price based on gross monthly income, debt obligations, down payment, and the 15% auto budget rule.
Financial & Budget Inputs
Your total pre-tax household monthly earnings.
Existing monthly student loans, credit cards, or personal debt.
In Brief
With a $6,000 monthly income and $300 in existing debt, your maximum recommended monthly car payment is $600. Combined with $7,000 total down/trade-in equity, you can afford up to a $38,061 vehicle.
Car Purchasing Power Composition
Financed loan principal vs Cash down payment & Trade-in equity
User Insights
Smart analysis of your current calculation
Interest represents 15% Budget Rule of your total out-of-pocket repayment.
Adding an extra monthly contribution accelerates principal payoff and cuts total financing costs.
Your $600/mo payment stays strictly within the 15% income guideline. Adding $1,000 extra down payment increases your vehicle budget to $39,061.
Calculation Methodology & Live Formula Breakdown
How Car Affordability is Calculated
Determining your realistic car budget requires analyzing your total debt-to-income (DTI) ratio. Most financial advisers recommend the **20/4/10** or **15% Rule**:
- 20% Down Payment: Put at least 20% down to prevent negative equity.
- 4-Year Loan Term: Limit financing to 48 or 60 months max.
- 15% Total Expense Cap: Keep monthly car payments under 15% of gross income.