Car affordability calculator

What the number means

The result is the car price at which the loan payment, insurance, fuel and maintenance together stay inside the share of income you chose. It is a ceiling for planning, not a recommendation to spend that much: a lender may approve far more, and the right amount for you may be less. The page answers the question the auto loan calculator does not: that one starts from a price and gives a payment, while this one starts from your income and works backwards.

Worked example

Gross income is $6,000 a month and the limit is 10%, so $600 covers everything. Insurance is $140, fuel for 12,000 miles at 30 mpg and $3.15 a gallon is $105.00 a month, and maintenance is $100; together $345.00. That leaves $255.00 for the payment. At 7% over 48 months it supports a loan of $10,649, and with 20% down the car can cost $13,311: $2,662 down and $10,649 borrowed, with $1,591 of interest in total.

What is the 20/4/10 rule?

It is a guideline for car buying: put 20% down, finance for no more than 4 years, and keep all transportation costs under 10% of your gross monthly income. Chase describes it as a helpful guideline rather than a one-size-fits-all formula, and counts the loan payment, insurance, maintenance and fuel in the 10%. That last point is the one most people miss, and it is why this calculator subtracts running costs before it finds the payment. Nothing in law or lending requires you to follow it; a lender looks at your credit and debt-to-income ratio, not at this rule.

How does the calculator turn income into a price?

Step 1: the monthly limit is gross income × the share (10% by default). Step 2: subtract insurance, fuel (miles per year ÷ miles per gallon × price per gallon ÷ 12), maintenance and any other cost. Step 3: what is left is the loan payment; the loan it supports is the payment × (1 − (1 + i)^−n) ÷ i, where i is the monthly rate and n the number of months. Step 4: the price is the loan ÷ (1 − down payment share). With the default inputs: $6,000 a month of income gives $600; insurance $140, fuel $105.00 and maintenance $100 leave $255.00, which at 7% over 48 months supports a $10,649 loan; with 20% down the price is $13,311. Example numbers, not market prices.

Why does a longer loan not mean a bigger car?

It can raise the price you can afford on paper, but the guideline caps the term at 4 years for a reason. With the same budget, a 6-year loan supports $14,957 instead of $10,649, a price of $18,696; but the extra 24 months cost more interest ($3,403 against $1,591) and you owe money for longer, so the car can be worth less than the loan for more of that time. Use the form's term field to see what a longer loan would do and decide with that in view.

How much do insurance and fuel change the answer?

A great deal, because they come off the top of a fixed budget. If insurance is $240 a month instead of $140, the payment room falls from $255.00 to $155.00 and the price you can afford from $13,311 to $8,091. Two cars with the same sticker price can have different insurance rates, fuel economy and repair costs, so get an insurance quote before you fall in love with a model.

What does it really cost to own a car?

AAA's Your Driving Costs study for 2025 puts the average cost of owning and operating a new car at $11,577 a year, about $965 a month, or 77 cents a mile at 15,000 miles a year. That includes depreciation ($4,334 a year), financing ($1,131), insurance ($1,694), license, registration and taxes ($813), fuel (13 cents a mile) and maintenance, repairs and tires (11.04 cents a mile). AAA's number includes depreciation, a cost that is not a cash payment, so it is higher than the 10% guideline measures. Compared with the same $72,000 a year of income in the example, AAA's average is 16.1%.

Should I include sales tax and fees?

The price here is the amount you finance plus the down payment. Sales tax, title and registration fees come on top in many states, so subtract them from the price (or put them into the down payment) before you shop. The auto loan calculator on this site adds tax, fees and a trade-in to a specific car price and gives the exact payment.

Common mistakes

The most common is to apply the 10% to the payment only. The guideline, as Chase states it, covers the payment, insurance, maintenance and fuel; counting the loan alone lets the total drift to 15% of income or more. Another is to take the dealer's monthly figure and ignore the term: a payment that fits is not the same as a price that fits. A third is to forget costs that are not in the form, such as parking, tolls, registration and a deductible. Put them in the "other" field so the limit shrinks accordingly.

Limits of this method

The 20/4/10 guideline is built for a typical new-car purchase. It does not know your debts, your savings or whether a car is essential for your job. For a household with a low income, 10% can be unrealistic when a car is the only way to get to work; for a household with a high income it can be needlessly tight. The guideline also treats a used and a new car alike, although the used one usually has lower insurance and higher repair costs. Use the result as one input next to your budget and your emergency fund.

Estimates for planning only — not financial advice or a loan offer; your lender's terms decide. Sources, checked October 27, 2026: Chase, What is the 20/4/10 rule for car buying? (the rule is described there as a guideline); AAA, Your Driving Costs 2025 fact sheet (reference averages only). Related: the auto loan calculator, car lease calculator, fuel cost calculator, gas mileage calculator and EV vs gas calculator. How we check our calculators.