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Car Affordability Calculator (20/4/10 Rule)

Max car sticker price you can afford from income, down payment, trade-in, insurance, sales tax, DTI ratio, and the 20/4/10 rule.

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Maximum car sticker price you can afford, given your income, down payment, trade-in, sales tax, insurance, and existing debt. Includes the conservative 20/4/10 rule recommendation (20% down, ≤4-year loan, ≤10% gross income on total transport).

The math walks backward from your monthly budget: max total auto spend = monthly income × cap%, minus monthly insurance = max loan payment, which inverts the amortization formula to get max loan principal. Add cash down + net trade-in (trade value minus loan still owed) to get max out-the-door, then back out sales tax and fees to land on sticker. The 20/4/10 path runs the same math with conservative inputs: 20% down, 48-month max term, 10% gross income cap.

Disclaimer: Excludes fuel, maintenance, parking, and registration renewals, which add ~$2,000-3,500/year to total cost of ownership. Lenders also have their own DTI thresholds (typically under 50%) - approval requires both your affordability math AND the bank's.

Frequently Asked Questions

How much car can I afford on a $75,000 salary?
Run it through the calculator with the 20/4/10 rule for the safe answer. For most $75k earners with average debts, that lands around $25,000-$30,000 out the door. The aggressive ceiling (15% of gross income on total auto) gets you to $40,000-$50,000 but leaves you cash-poor. The conservative path (10% of gross on total auto including insurance, 4-year loan, 20% down) protects your savings rate and gives you margin if your income drops.
What is the 20/4/10 rule?
It is a financial-planning heuristic for car buying: 20% down payment, no longer than 4-year loan term, and no more than 10% of your gross monthly income on total transport (loan payment + insurance + gas + maintenance). The 20% down protects you from going underwater the moment you drive off the lot (new cars depreciate ~20% in year one). The 4-year term limits how long you owe more than the car is worth. The 10% cap keeps your wealth-building unconstrained.
Should I buy new or used to maximize affordability?
A 2-3 year-old used car typically gives you 80% of the new-car experience for 60-70% of the price, since most depreciation has already hit. The math: a $40k new car becomes a $28-30k 3-year-old car with 30-40k miles and 90% of its useful life left. Run the calculator twice - once with a new-car price target and once with the equivalent used price - and see how much faster you can be debt-free with the used route.
My credit score is below 660 - does that change what I can afford?
Yes, significantly. Subprime auto loan rates in 2026 run 12-18% for borrowers under 660, vs 6-8% for prime credit. On a $25,000 loan over 60 months that is roughly $80-150 more per month, which directly shrinks the sticker price you can afford. Build credit first if you can, or put down a larger down payment to shrink the loan. The calculator lets you plug in your real rate so you see the impact.

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