Calculate the maximum monthly payment, loan amount, and total car price you can afford, based on your gross monthly income, down payment and loan terms.
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Our Auto Loan Calculator starts from a known loan amount and calculates your monthly payment. This calculator works in the opposite direction, starting from what you can afford to pay each month (based on a target share of your income), and solving the loan payment formula backwards to find the maximum loan amount, and therefore maximum car price, that payment supports.
A commonly cited guideline is keeping your total vehicle costs, payment, insurance and fuel, to around 15-20% of gross monthly income, with the loan payment itself often targeted lower within that. This calculator lets you set your own target percentage to match your personal budget and other financial obligations.
A $6,000 gross monthly income, targeting 15% for the car payment, with a $3,000 down payment, no trade-in, 6.5% APR over 60 months: max monthly payment = $6,000 × 0.15 = $900. Solving the loan formula backwards for that $900 payment at 6.5%/60 months gives a max loan amount of $45,997.81, plus the $3,000 down payment, a max affordable car price of about $48,997.81, with total interest of $8,002.19 over the loan's life.
Treating the max affordable car price as the actual out-the-door price, sales tax, registration and dealer fees aren't included, they'd need to come from additional down payment or be added on top of this estimate.
Using net (take-home) income instead of gross income, this calculator follows the lending industry convention of using gross income, plugging in net income instead would understate what a lender's calculation would actually show as affordable.
Maxing out the percent-of-income target without leaving room for insurance, fuel, and maintenance, the commonly cited 15-20% guideline is meant to cover total vehicle costs, not the loan payment alone, budgeting the full percentage toward the payment itself can leave a tight margin for everything else a car costs to run.
This calculator uses gross (pre-tax) monthly income, following the common lending industry convention, similar to how mortgage affordability is typically calculated. Keep in mind your actual take-home pay after taxes and other deductions will be lower.
No, this estimates the price the loan portion of your purchase can support, plus your down payment and trade-in value. Sales tax, registration and dealer fees would need to be covered separately or factored into your down payment.
With a fixed monthly payment budget, a lower interest rate means less of each payment goes toward interest, so more of it goes toward principal, letting that same monthly payment support a larger loan amount.
Auto Loan Calculator
Calculate your monthly car loan payment and full amortization schedule.
Debt-to-Income (DTI) Calculator
Calculate your debt-to-income ratio for loan and mortgage qualification.
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