Car Affordability Calculator to Calculate How Much Car You Can Afford

Car Affordability Calculator Sign

This calculator will calculate the size of the loan and the price of the car you can afford based on your monthly car payment affordability.

Plus, the calculator incorporates the down payment, sales tax, trade-in, and cash rebate when calculating how much car you can afford.

And finally, the calculator provides you with the option of creating a printer friendly payment schedule.

Note: If you are the type of person who doesn't painstakingly track your expenses and carefully budget your income, this calculator will be of no use to you. Why? Because you will only be able to make a guess as to how much of a monthly payment you can afford. And "guessing" can be extremely hazardous to your financial health.

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Car Affordability Calculator

Calculate how much car you can afford based on the monthly payment and down payment you can afford, and on any sales tax, rebate, or trade-in that may apply.

Learn More

Selected Data Record:

A Data Record is a set of calculator entries that are stored in your web browser's Local Storage. If a Data Record is currently selected in the "Data" tab, this line will list the name you gave to that data record. If no data record is selected, or you have no entries stored for this calculator, the line will display "None".

DataData recordData recordSelected data record: None
PaymentMonthly pmtAffordable monthly car paymentAffordable monthly car payment ($):

Affordable monthly car payment:

Enter the monthly payment you feel you could afford after accounting for the ongoing ownership costs that will come with purchasing the vehicle (gas, insurance, maintenance, repairs, licensing, sheltering, etc.).

Down pmtDown pmtDown payment you can affordDown payment amount you can afford ($):

Down payment amount you can afford:

Enter the amount you feel you can pay down on the car purchase. If you have no money for a down payment, enter a zero.

Trade allowTrade allowTrade-in allowanceTrade-in allowance ($):

Trade-in allowance:

If you are trading in a vehicle, enter the trade-in allowance on this line. If no trade-in, enter a zero or leave blank.

Trade-in balTrade-in balAmount still owed on trade-inAmount still owed on trade-in ($):

Amount still owed on trade-in:

If you are trading in a vehicle and still owe money on that vehicle, enter the amount you owe on this line. If no trade-in or no money is owed on the trade-in, leave blank or enter a zero.

RebateCash rebateCash rebate to add to down pmtCash rebate to be added to down payment ($):

Cash rebate to be added to down payment:

If the vehicle you are purchasing comes with a cash rebate, and you would like to apply the rebate to the purchase, enter the amount on this line. Otherwise leave blank.

Loan rateFinance rateExpected annual interest rateExpected annual interest rate (%):

Expected annual interest rate:

Enter the annual interest percentage you will be charged for the loan, without the percent sign (for .08 or 8%, enter 8).

# payments# paymentsCar loan term in monthsCar loan term in months (#):

Car loan term in months:

Enter the term of the loan in number of months (number of payments).

1 year=12 months
2 years=24 months
3 years=36 months
4 years=48 months
5 years=60 months
6 years=72 months
Sales taxSales taxSales tax percentageSales tax percentage (%):

Sales tax percentage:

Enter the combined total of all applicable sales tax percentages (state, local, etc.). Enter as a percentage, but without the percent sign (for .07 or 7%, enter 7).

Schedule:Schedule:Include schedule:Include amortization schedule:

Include amortization schedule:

If you would like the results to include an amortization schedule, move the switch to the "Yes" position. Otherwise move the switch to the "No" position.

Net price:Net price:Net purchase price of vehicle:Net purchase price of vehicle:

Net purchase price of vehicle:

This is the total of the loan amount you can afford, plus any entered down payment, net trade-in allowance, and rebate amounts, minus any applicable sales taxes.

Req loan amt:Req loan amt:Required loan amount:Loan amount you would need to qualify for:

Loan amount you would need to qualify for:

Based on the monthly payment you can afford, the annual interest rate, and the number of payments, this is the loan amount you would need to qualify for to purchase the vehicle price listed in the field above this one.

Interest:Interest cost:Interest cost of loan:Interest cost of loan:

Interest cost of loan:

This is how much interest you will end up paying between making your first and last monthly payments.

If you would like to save the current entries to the secure online database, tap or click on the Data tab, select "New Data Record", give the data record a name, then tap or click the Save button. To save changes to previously saved entries, simply tap the Save button. Please select and "Clear" any data records you no longer need.

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Help and Tools

Learn

Car finance based on income and how to REALLY know how much car you can afford.

Car Finance Based On Income Calculator

The following is based on a recent Consumer Expenditure Survey from the US Bureau of Labor Statistics.

Select your household's annual before-tax salary/income and the calculator will estimate how much car you can afford based on what other households in your income bracket spend on a car.

Annual Before-Tax Income
Monthly car purchase (net outlay):$98.00
Car price based on purchase every 5 years:$5,880.00
Ownership CostsMonthly
Gasoline, other fuels, and motor oil:$72.00
Maintenance and repairs:$27.58
Vehicle insurance:$41.08
Vehicle finance charges:$5.58
Vehicle rental, leases, licenses, and other charge:$18.17
Total purchase and ownership costs:$262.41

Of course, the price of the car you can afford depends on the difference between your income and expenses, not just on your income. After all, if your expenses exceed your income then you can't afford any priced car no matter how much you make.

Are You Bungee Jumping With a Cord That's Too Long?

Imagine you are standing on the railing of a bridge and peering down at a rocky river bottom several hundred feet below.

Further imagine that you just haven't had the time (too many good shows on TV?) to measure the length of the bungee cord that connects you to the bridge. Nor have you had the time to measure the distance from the bridge down to the rocky river bottom.

But hey, the commissioned salesperson you bought the bungee cord from told you not to worry about the length and to just go have fun. And they of all people should know what's best for you, right?

So would you go ahead and jump? Of course not.

Comparatively speaking, this is how most people jump into financial obligations. And because they don't take the time to track and accurately forecast their income and expenses, they end up relying on commissioned salespeople to advise them on whether or not to jump. As a result they don't have a clue as to whether or not the next jump will end up causing their financial lives to go "splat" on the "rocky bottom."

How to REALLY Know How Much Car You Can Afford

The only way you can accurately predict how much car you can afford is to know exactly what your life is costing you on a month to month basis. But the costs you need to be tracking don't all just show up as monthly bills in your mailbox. Many of the costs you need to be tracking are accumulating behind the scenes.

Everything you own that can wear out IS wearing out at this very moment. These are all assets that will need to be re-purchased at some point in the future. Therefore, when trying to determine how much you can afford to spend on something, it's not enough to simply track the obvious monthly cash inflows and outflows (most people don't even do that much). You also need to track the rate at which what you own is wearing out so you can be setting aside funds to replace all of those assets as they need to be replaced.

For example, if you own a home you should be setting aside funds to replace all furniture, electronics, fixtures, appliances, roofing, flooring, paint, heating and cooling equipment, lawn and garden machines, and the list goes on.

How Do You Know How Much You Should Be Setting Aside?

Well, and I know this may sound ridiculous to you, but just like successful businesses do, you need to make a list of everything that will require replacement.

Then for each item listed you need to estimate how many months (years x 12) the asset will last and how much it will cost to replace the asset.

Next, divide the replacement cost of each asset by the number of months you estimate it will last.

Finally, total up all of the monthly replacement estimates to see how much you should be setting aside each month.

If you choose NOT to acknowledge or plan for these depreciation expenses, it doesn't change the fact that they are accumulating behind the scenes. And unless you are aware of how much these costs are on a monthly basis, you will have no reliable basis for determining just how much car you can afford.

In fact, if you will need to borrow money to purchase a car, this tells me that you have not been setting aside your current car's monthly depreciation expense. Otherwise you would be able to pay cash for the car you are purchasing -- which would likely put an extra $2,000 to $4,000 dollars in your pocket (or into your investments) from the interest cost savings.

But here's the real kicker. If you are borrowing money to purchase a car (an asset that wears out), then in order to get ahead you will need to set aside (deposit to "next car" savings account) the monthly depreciation expense of the car -- which is an amount roughly equal to the monthly car loan payment you will already be making.

In other words, if you are borrowing money to purchase a car, then whatever monthly car payment you think you can afford would need to be cut at least in half before you enter the amount into the car affordability calculator.

I say "at least in half" because this may still be more than you can actually afford if you are not setting aside the monthly depreciation expenses of all of your other depreciable assets.

Adjust Calculator Width:

Move the slider to left and right to adjust the calculator width. Note that the Help and Tools panel will be hidden when the calculator is too wide to fit both on the screen. Moving the slider to the left will bring the instructions and tools panel back into view.

Also note that some calculators will reformat to accommodate the screen size as you make the calculator wider or narrower. If the calculator is narrow, columns of entry rows will be converted to a vertical entry form, whereas a wider calculator will display columns of entry rows, and the entry fields will be smaller in size ... since they will not need to be "thumb friendly".

Show/Hide Popup Keypads:

Select Show or Hide to show or hide the popup keypad icons located next to numeric entry fields. These are generally only needed for mobile devices that don't have decimal points in their numeric keypads. So if you are on a desktop, you may find the calculator to be more user-friendly and less cluttered without them.

Stick/Unstick Tools:

Select Stick or Unstick to stick or unstick the help and tools panel. Selecting "Stick" will keep the panel in view while scrolling the calculator vertically. If you find that annoying, select "Unstick" to keep the panel in a stationary position.

If the tools panel becomes "Unstuck" on its own, try clicking "Unstick" and then "Stick" to re-stick the panel.