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How Much Car Can I Afford?

Find a sensible car budget from your income using the 20/4/10 rule: 20% down, 4-year loan, transport costs under 10% of gross income.

Gross yearly income ($)

Max share of income for the car (%)

Insurance & fuel per month ($)

Loan APR (%)

Loan term (months)

Down payment (% of price)

How to use it

Enter your gross income.
10% for the payment plus insurance and fuel is a conservative guide; some use 15%.
Enter what insurance and fuel cost you per month.

How it works

Monthly budget = income ÷ 12 × share − insurance & fuel. The loan that payment supports = payment × (1 − (1+i)^−n) ÷ i. Car price = loan ÷ (1 − down %).

FAQ

What is the 20/4/10 rule?

Put at least 20% down, finance for no more than 4 years and keep total car costs under 10% of gross income.

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