How much car can you actually afford?

The finance industry answers this question backwards — "what monthly payment are you comfortable with?" — because payments can be stretched until anything feels affordable. Here's the forward version.

The 20/4/10 rule

• 20% down — so you're never underwater from day one
• 4-year (48-month) loan — or 60 at most; if it needs 72–84 months, it's too much car (here's why)
• Total car costs under 10–15% of gross income — payment plus insurance, fuel, and maintenance, not payment alone

Earn $70,000? That's roughly $580–875/month for everything car-related — realistically a $350–550 payment once insurance and fuel take their share.

Backing into your max price

The calculator's affordability mode does this directly: enter the monthly payment you've budgeted, your APR and term, plus your down payment, and it solves for the maximum vehicle price. It's the same amortization formula run in reverse — no guessing.

The costs people forget

• Insurance — get a real quote for the specific model before buying; it varies wildly
• Sales tax and fees — often 7–10% on top of the sticker (trade-ins can reduce this)
• Depreciation — the biggest real cost of ownership, invisible until you sell

The uncomfortable truth

If the 20/4/10 version of your budget buys less car than you wanted — that's the point. The rule isn't measuring what a lender will approve (they'll approve much more); it's measuring what won't quietly eat the rest of your financial life.

FAQ