Balance over time
Remaining balanceYear-by-year schedule
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This car affordability calculator shows how expensive a car you can comfortably buy, based on the popular 20/4/10 rule: put at least 20% down, finance for no more than 4 years, and keep your total car payment under 10% of your gross monthly income.
How to use it
Enter your annual income, planned down payment, the auto-loan rate, and a term. The calculator caps your payment at a healthy share of income and works backward to a realistic car price.
Why the 20/4/10 rule works
Keeping the payment near 10% of income leaves room for insurance, gas, and maintenance — the real cost of ownership. A 4-year (or shorter) term means you build equity instead of staying underwater on the loan.
Related
Car Affordability Calculator FAQ
How much car can I afford on $70,000 a year?
Using the 20/4/10 rule with $4,000 down at 7.5% over 48 months, about a $28,000–$30,000 car keeps the payment near 10% of income. Raise the down payment or term to adjust.
What is the 20/4/10 rule for buying a car?
Put 20% down, finance for 4 years or less, and keep your total monthly vehicle cost (payment plus insurance) under 10% of gross monthly income. It is a simple guardrail against over-buying.
Should my car payment be based on gross or net income?
The 10% rule uses gross (pre-tax) monthly income as a ceiling. If your other expenses are high, use a lower percentage (8%) to stay comfortable after taxes and insurance.
Is it smarter to buy a cheaper car?
Often yes. A lower price means a smaller loan, less interest, cheaper insurance, and faster equity. Many buyers find a slightly older or less expensive car frees up hundreds a month.
Does the loan term change how much car I can afford?
Stretching to 72 months lets you buy a pricier car for the same payment, but you pay more interest and risk owing more than the car is worth. A 48–60 month term is the healthier choice.
Written by Nicolas William, Lead Financial Editor at Finances News. Estimates for planning only. Last updated 2026.