Car Affordability Calculator
Dealers ask what monthly payment you want; the smarter question is what your income supports. This calculator works backwards from your budget to a max car price.
How this calculator works
The 15% rule suggests keeping total car costs — payment, insurance, fuel, maintenance — around 15% of gross income. This calculator reserves 15% of your income, subtracts other debt payments, and uses the remaining payment budget to solve for the largest loan you can carry at your rate and term, then adds your down payment to get the max price.
Frequently asked questions
Why do lenders approve more than the 15% rule?
Lenders size loans off your debt-to-income ratio, which allows roughly 36% of income in total debt — far more than the 15% car rule. The rule exists to protect your cash flow, not to set the lender's limit: a loan you're 'approved' for can still be one that leaves you cash-poor.
Does the 15% include insurance and gas?
The classic 15% figure covers the full cost of owning a car — payment, insurance, gas, and maintenance — not just the loan payment. This calculator uses the payment portion only, so budget the other costs on top when picking a price.
Should I extend the term to afford a nicer car?
A longer term lowers the payment and raises the price you can borrow, but adds thousands in interest and leaves you underwater longer — 84-month loans often owe more than the car is worth for years. If you can't afford the car at 60 months, the honest answer is a cheaper car.
Disclaimer: Results are estimates for general information only and do not constitute financial, tax, or legal advice. Figures reflect 2026 rules and may change. Always confirm current limits and consult a qualified professional before making decisions. Official figures: IRS.gov · 2026 limits per IRS tax inflation adjustments.