AUTO CALCULATOR
Car Affordability Calculator
Find out how much car you can afford based on your monthly payment budget, down payment, trade-in value, interest rate, loan term, sales tax, and fees.
How Your Estimate Is Calculated
This calculator provides an estimate based on the information entered. Actual vehicle prices, taxes, fees, financing terms, and loan approval requirements vary by lender and location. Sales tax is modeled as a percentage of the vehicle price and may be calculated differently in your area. This estimate does not determine whether a vehicle is financially appropriate for your overall budget.
How Much Car Can I Afford?
The amount of car you can afford depends on more than the vehicle's purchase price. Your monthly payment budget, down payment, trade-in value, interest rate, loan term, taxes, and fees can all affect the maximum vehicle price you can finance.
Our car affordability calculator works backward from your desired monthly payment to estimate the maximum car price that fits within your financing assumptions.
How Does the Car Affordability Calculator Work?
The calculator first estimates the maximum loan amount supported by your monthly payment, interest rate, and loan term.
It then adds your down payment and trade-in value and accounts for estimated sales tax and other fees to calculate an estimated maximum vehicle price.
The calculation uses standard loan amortization. When an interest rate is entered, the calculator estimates how much principal can be financed while keeping the monthly payment within your selected budget.
Information You Need
To estimate your car affordability, enter the following information:
- Monthly car payment budget
- Down payment
- Trade-in value
- Annual interest rate (APR)
- Loan term
- Sales tax
- Other estimated fees
Monthly Car Payment Budget
Your monthly car payment budget is the maximum amount you want to spend on the vehicle loan each month.
A higher monthly payment generally allows you to finance a more expensive vehicle, while a lower monthly payment reduces the estimated maximum car price.
Keep in mind that your total cost of owning a vehicle can also include insurance, fuel, maintenance, registration, and other expenses that are not included in the loan payment.
Down Payment and Trade-In Value
A down payment reduces the amount that needs to be financed. A larger down payment can therefore increase the estimated vehicle price that fits within a given monthly payment budget.
A trade-in can also contribute toward the purchase. Enter the estimated value of your trade-in vehicle to include it in the affordability estimate.
How Interest Rate and Loan Term Affect Affordability
The interest rate and loan term have a significant effect on the amount you can finance for a given monthly payment.
With the same monthly payment, a lower interest rate generally allows you to finance more because less of your payment goes toward interest.
A longer loan term can also increase the amount that can be financed while keeping the monthly payment lower. However, extending the loan term can result in paying more interest over the life of the loan.
Sales Tax and Fees
Taxes and fees increase the total amount required to purchase a vehicle. This calculator includes estimated sales tax and other fees when determining the maximum car price.
Actual vehicle taxes and fees vary depending on your location, purchase price, trade-in situation, dealer charges, registration requirements, and other factors.
Car Affordability Example
Suppose you want to spend up to $600 per month on a car loan and have a $5,000 down payment. If you use a 7% annual interest rate and a 60-month loan term, the calculator estimates the maximum amount you could finance based on those assumptions.
After accounting for the down payment, estimated sales tax, and other fees, the calculator converts that financing capacity into an estimated maximum vehicle price.
Changing any of these inputs can change the estimated amount you can afford.
Car Price vs. Monthly Payment
Two vehicles with the same purchase price can have different monthly payments because of differences in down payment, interest rate, loan term, taxes, and fees.
Conversely, a monthly payment budget can help you determine a vehicle price range that fits your financing assumptions.
If you already know the price of the vehicle you want, you can also use our Car Payment Calculator to estimate the monthly payment.
Car Affordability vs. Car Payment Calculator
A car affordability calculator and a car payment calculator answer two different questions.
The Car Payment Calculator starts with a vehicle price or loan amount and estimates the monthly payment.
The Car Affordability Calculator starts with your monthly payment budget and works backward to estimate the maximum vehicle price that fits within that budget.
Is the Maximum Car Price the Same as What I Should Spend?
Not necessarily. The maximum price shown by this calculator is a financing estimate based on the information you provide.
Your overall vehicle budget may also need to account for insurance, fuel, maintenance, repairs, registration, parking, and other ownership costs.
You should also consider your other monthly expenses, savings goals, emergency fund, and financial obligations when deciding how much to spend on a vehicle.
How Accurate Is a Car Affordability Calculator?
This calculator provides an estimate rather than a guaranteed loan offer or purchase price.
Your actual financing options may differ based on your credit profile, lender requirements, vehicle type, loan approval, taxes, fees, dealer charges, and other factors.
Tax rules and trade-in treatment can also vary by location, so the calculator should be used as a planning tool rather than a final financing quote.
Frequently Asked Questions
How much car can I afford?
The amount of car you can afford depends on your monthly payment budget, down payment, trade-in value, interest rate, loan term, taxes, fees, and other financial obligations. Enter your information above to estimate a maximum vehicle price.
How does a car affordability calculator work?
It starts with your monthly payment budget and uses your interest rate and loan term to estimate the maximum amount you can finance. It then accounts for your down payment, trade-in value, estimated taxes, and fees to estimate the maximum vehicle price.
Does a larger down payment increase car affordability?
Generally, yes. A larger down payment reduces the amount that needs to be financed and can increase the estimated vehicle price that fits within the same monthly payment budget.
Does a longer loan term increase how much car I can afford?
A longer loan term can allow a larger loan amount while keeping the monthly payment within the same budget. However, a longer term can also result in more interest paid over the life of the loan.
Does interest rate affect how much car I can afford?
Yes. A lower interest rate generally allows more of a fixed monthly payment to go toward the loan principal, while a higher interest rate reduces the amount that can be financed.
Does this calculator include sales tax and fees?
Yes. You can enter an estimated sales tax rate and other fees. The actual taxes and fees associated with a vehicle purchase can vary depending on your location and transaction.
Is the maximum car price the amount I should spend?
No. The result is a financing estimate, not personal financial advice. You should also consider insurance, fuel, maintenance, registration, savings, and your other monthly expenses.
What is the difference between car affordability and car payment?
A car payment calculator estimates the monthly payment for a known vehicle price or loan amount. A car affordability calculator starts with a monthly payment budget and estimates the vehicle price that could fit within that budget.