Finance Calculator
Car Affordability Calculator
Find out how much car you can realistically afford based on your income, monthly expenses, and savings. Uses the 20/4/10 rule as a baseline.
Your Financial Snapshot
Before taxes (pre-tax income).
Credit cards, student loans, rent/mortgage, etc.
Max Car Price
based on your budget
Max Monthly Payment
$450
Suggested Down
$5,000
Max Loan Amount
$23,400
Debt-to-Income
9.6%
Budget Health
The 20/4/10 Rule Explained
How affordability is calculated.
Max Loan = Max Payment using EMI formula
Max Price = Max Loan + Down Payment
Debt-to-Income = (Existing Debts + Car Payment) / Income
What is the 10% rule?
Financial advisors recommend keeping all car-related expenses (loan payment + insurance + fuel) under 15–20% of take-home pay. The 10% rule applies this conservatively to just the payment and insurance.
Why does DTI matter?
Lenders typically want your total debt-to-income ratio (all monthly debts ÷ gross income) to stay under 36–43%. A high DTI may result in loan denial or higher interest rates.
Frequently asked questions.
How much car can I afford on a $60,000 salary?
At $60K/year ($5K/month gross), the 10% rule suggests a max car payment of ~$500/month including insurance. With a $5K down payment and 6.5% APR over 60 months, that's a car price of roughly $27,000–$30,000.
Should I use gross or net income?
This calculator uses gross income (before taxes) to match how lenders evaluate your application. For personal budgeting, apply the 10% rule to your net (take-home) pay for a more conservative estimate.
Is 0% down payment a good idea?
Financing with no money down means your loan balance immediately exceeds the car's value (since new cars depreciate ~20% year one). This puts you "underwater" — you'd owe more than the car is worth if you needed to sell.
What credit score do I need for a car loan?
Most banks approve loans with scores above 600, but you'll get the best rates (under 6% APR) with scores above 720. Below 580 typically means subprime rates of 12–20%.
What is the 20/4/10 rule for buying a car?
It's a simple affordability guardrail: put at least 20% down, finance for no more than 4 years, and keep total vehicle costs — payment plus insurance — under 10% of your gross monthly income. Stay inside all three and you're very unlikely to overextend or end up underwater.
Does my other debt affect how much car I can afford?
Yes. Lenders look at your debt-to-income ratio — all monthly debt payments divided by gross income — and generally want the total, including the new car, under about 40%. Existing student loans, credit cards, or a mortgage all shrink the car payment you'll qualify for.