Car Affordability Calculator
Find out the maximum car price you can afford based on income and the 20/4/10 rule.
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Frequently Asked Questions
What is the 20/4/10 rule for buying a car?
The 20/4/10 rule: put at least 20% down, finance for no more than 4 years, and keep total vehicle expenses (payment + insurance + gas) under 10% of gross monthly income. On a $6,000/month income that is $600 max. With insurance and gas taking $250-$350, your loan payment should stay under $250-$350/month, pointing to a car in the $15,000-$20,000 range with 20% down.
How much car can I afford on my salary?
General guidance: spend no more than 20-35% of your annual take-home pay on a car. On a $60,000 take-home ($5,000/month) that is $12,000-$21,000. The lower end is financially safer. Remember the purchase price is only part of the cost — insurance, fuel, maintenance and registration add $200-$800/month on top of the loan payment.
Should I buy new or used?
Used cars typically offer 30-50% lower purchase price, lower insurance premiums, slower depreciation (new cars lose 20% in year one), and similar reliability for models 2-4 years old (still under warranty). Buy new when: 0% financing promotions make it cost-competitive, you plan to keep the car 10+ years, or the specific model has poor used car reliability history.