Car affordability calculator
20% down, a loan no longer than four years, total vehicle spend at or under 10% of income. This finds the price where all three hold at once, and tells you which one is actually stopping you from spending more.
Worked example — Maximum car price on $6,500 a month at 6.9%: $20,398. 20% down, a 48-month loan at 6.9%, and 10% of income minus $260 a month for insurance, fuel and upkeep
Price your own income against all three limits at once
Enter gross monthly income, the loan APR, and what insurance, fuel and upkeep actually run. The down payment, the income share and the loan term default to the rule itself, 20/4/10, and stay adjustable behind the fold, along with a wider comparison scenario closer to what a lender extending a longer term might approve.
$6,500/mo, 6.9% APR: $6,500 gross a month, a 6.9% loan, and $260 a month for insurance, fuel and upkeep.
Rule settings and lender comparison 5
"What a lender might approve" is a wider illustrative scenario, 72 months and 15% of income, adjustable above. It is not a specific lender's real underwriting criteria, and approval always depends on credit, debt and the lender's own rules.
Gold is the rule as entered. Green is whichever single change adds the most room; blue is the other two, for comparison. Only one lever is changed at a time, the other two stay at the values above.
How much car can I afford on $6,500 a month?
$20,398, at 6.9% over 48 months with 20% down and $260 a month in insurance, fuel and upkeep. That caps the loan payment at $390 a month, ten percent of the $6,500 income minus the running costs, and finances $16,318 of it, with $4,080 in cash making up the rest. Change the APR, the income, or the running costs above and the ceiling moves with them; nothing here is a flat percentage of price the way "spend twice your salary" rules of thumb are.
A tighter budget moves the same arithmetic a lot: at $4,200 a month and 8.9% APR, the ceiling is $10,065, and the running costs alone already eat $220 of the $420 cap before a loan payment starts.
Maximum car price by income and rate under the 20/4/10 rule
Held at 20% down, a 48-month loan, and $250 a month for insurance, fuel and upkeep, so the table isolates what income and rate alone do to the ceiling. Your own running costs will move your own number above or below this row; the calculator above uses the figure you enter.
| Gross income/mo | 5% APR | 7% APR | 9% APR | 11% APR |
|---|---|---|---|---|
| $3,000 | $2,714 | $2,610 | $2,512 | $2,418 |
| $4,000 | $8,142 | $7,830 | $7,535 | $7,255 |
| $5,000 | $13,570 | $13,050 | $12,558 | $12,091 |
| $6,500 | $21,711 | $20,880 | $20,092 | $19,346 |
| $8,000 | $29,853 | $28,710 | $27,627 | $26,600 |
| $10,000 | $40,709 | $39,150 | $37,673 | $36,273 |
| $12,000 | $51,565 | $49,590 | $47,719 | $45,946 |
Reading down a column: doubling income more than doubles the ceiling, because the down payment share of price stays fixed at 20% while the loan share grows against a fixed rate. Reading across a row: the gap between 5% and 11% APR at $6,500 a month is $2,366, almost entirely from how much loan the same $400 monthly payment supports at each rate.
Which of the three, income, term or down payment, binds first?
On the default scenario it is the four-year loan term. Extending the loan from 48 to 72 months would raise the ceiling to $28,675, $8,277 more room than staying at four years buys anywhere else. Spending 12% of income instead of 10% is the next-biggest lever, worth $6,799; putting 25% down instead of 20% is worth the least of the three, $1,360, because a few points of down payment barely moves how much of the price the loan has to cover.
This is not fixed. On the tighter $4,200-a-month scenario, running costs already take a big enough bite out of the 10% cap that the 10% income cap binds hardest instead, worth $4,227 in extra ceiling versus $3,842 from the longer term. Which limit is actually holding a specific reader back depends on how their income, rate and running costs split, which is exactly what the calculator above solves for their own numbers rather than assuming it is always the down payment.
The rule's maximum vs what a lender would approve
A lender underwriting to a longer term and a wider share of income, 72 months and 15% of income instead of the rule's 48 months and 10%, would approve roughly $52,570 on the same $6,500-a-month income, $32,173 more than the rule's own $20,398 ceiling. Approval is not the same question this rule answers: a lender is checking whether the loan can be repaid at all, at whatever term and income share its own underwriting allows, while the 20/4/10 rule is a stricter, self-imposed budget meant to leave room in the same paycheck for everything a car costs beyond the loan. Being approved for $32,173 more car is not the same as being able to afford it.
The lender figures above are an adjustable illustrative comparison, not a specific lender's real underwriting criteria: actual approval depends on credit history, existing debt, and the individual lender's own rules, none of which this page has access to. Adjust the comparison term and income share in the calculator's advanced settings to match an offer in hand.
The next question after this one
Car loan vs lease vs cash calculatorCalculatorOnce you know the price ceiling, the next decision is whether financing, leasing, or paying cash for a car at that price is the better deal.Open nextOther questions
- Auto loan refinance calculatorCalculatorOnce the loan exists, this checks whether a refinance offer is a real rate improvement or just a longer term dressed up as savings.
- Extra payment loan payoff calculatorCalculatorAn extra payment on the loan you take out shortens the payoff and cuts the interest, priced against your own numbers.
All 130 calculatorsHow JMM sources and checks its numbersWhat stays free, and what early access would add
The rest of the car-buying chain
Once you have a price ceiling, the next questions are loan versus lease versus cash, whether a refinance offer is actually a better rate and not just a longer term, and what an extra payment does to the payoff date.