Car Affordability Calculator
How much car can you afford? Based on the 20/4/10 rule — 20% down, 4-year loan, 10% of gross monthly income.
Before taxes
Max vehicle price
$30,450
Max monthly payment
$583
10% of monthly gross income
Down payment (20%)
$6,090
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The 20/4/10 rule for car buying
The 20/4/10 rule is a widely used guideline to avoid being car-poor: put at least 20% down, finance for no more than 4 years, and keep total car expenses (payment + insurance) below 10% of gross monthly income.
This calculator uses the 10% threshold on your gross monthly income with a 4-year loan to determine your maximum car price assuming a 20% down payment. It gives you a ceiling, not a target — buying within this limit leaves room for insurance, fuel, and maintenance.
Why cars are expensive beyond the sticker price
A car's true cost includes: loan interest, insurance (can be $1,200–$3,000+/yr), fuel, maintenance, registration, and depreciation. New cars lose 15–20% of their value in the first year and ~50% within 5 years. This is why buying a 2–3 year old certified pre-owned vehicle often offers the best value — someone else absorbed the steepest depreciation.
When to bend the rules
The 20/4/10 rule is a conservative guideline. If you live in a city with excellent public transport, a car is optional. If you live rurally and commute long distances, higher spend may be justified. The rule breaks down if you ignore insurance costs, which can make an "affordable" car payment unaffordable in total.