Car Affordability Calculator

How much car can I afford?

We make it easy for you to calculate the maximum car amount you can afford based on your preferred monthly payment. Enter details about your income, down payment, trade, preferred monthly payment and more. Once entered, an estimated car price will be calculated. Try out the easy-to-use calculator to find vehicles within the price range that meets your preferred monthly car payment.

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Frequently Asked Questions

How much car can I afford based on salary?

Many personal finance experts recommend that your car budget costs from your loan payment, auto insurance, gas, maintenance, and repairs, equal no more than 10% of your monthly net income or take-home pay after taxes.

How much do you need to make to afford a $100,000 car?

It would be easy to tell you that you need to make $200,000 to buy a $100,000 car. Unfortunately, spending half of your income on a vehicle wouldn’t be wise since you also must factor in car insurance, gas, maintenance, and any potential repairs. Then, suppose you pay a mortgage or rent. In that case, you need to consider groceries, utilities, and other household expenses.

To afford a $100,000 car, it’s probable you need to make $300,000 a year conservatively after taxes.

For this example, we use our car payment calculator and approach it using the price of the car of $100,000. According to credit agency Experian’s State of the Automotive Finance Market, the average new car loan interest rate is 3.48% for buyers with credit scores in the range of 661 to 780. The average used car loan interest rate is 5.49% for those with scores in the same range.

As a result, we’ll assume the buyer wants a new car, qualifies for an interest rate of 3.48%, prefers a loan term of 60 months, and will put down $25,000. That means the estimated monthly payment is $1,509 for the estimated total loan price of $90,550 after tax and down payment.

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If your monthly car payment is $1,509, we calculate that you will need $1,000 for car insurance, gas, car maintenance, and repairs, for a total budget of $2,500/month.

Remember that you can always lower your costs by trading in a vehicle or using more for a down payment, helping to reduce the actual annual income amount after taxes that we suggest.

How much should my car be if I make $50K? (Interesting idea for an interactive table or chart here for users)

Because it’s wise to keep your car payment, maintenance, gas, repairs, and insurance costs at or below 10% of your monthly take-home pay, you’ll need to do some math.

Annual pay: $50,000
Annual tax rate: Approximately 23%, or $11,500 in taxes
Take home pay estimate: $38,500
$38,500 divided by 52 weeks = $740.38 per week take home pay
$740.38 per week x 4 weeks = $2,962* estimated monthly take home pay
$2,962* x 10% = $296.20 total

Spending $296.20 per month on a car payment plus insurance, fuel, and maintenance and repairs costs, such as oil changes, doesn’t leave a lot of room for buying a new car. That is, unless your savings account is flush with cash, and you can put down a significant down payment or pay outright for the vehicle in cash. However, most people don’t keep thousands of dollars in savings. We advise purchasing a used car and keeping your payments under $150/month if you finance a vehicle. That leaves $146.20/month for car insurance, gas, and car maintenance and repairs.

Using our Car Affordability Calculator, you can plug in the $150 as a preferred monthly payment and then plug in variables for financing the vehicle. For this example, we will use a 5.49% interest rate for the used car, 36-month loan term, 8% sales tax rate, and a down payment of $2,500.

The result: Your estimated total car price is $7,071.

Trading in a car can also help lower your out-of-pocket expenses. Remember that higher auto insurance and gas prices can affect your bottom line affordability. It’s better to spend conservatively and consider a slightly lower cost used vehicle to factor in for the unknowns.

How much car can I afford based on income?

It depends. Personal finance experts recommend spending no more than 10% of monthly net income or take-home pay after taxes on your car loan payment, auto insurance, gas, maintenance, and repairs. Using our car affordability calculator will help you determine how much you may feel comfortable spending on a car.

What car can I afford?

Many variables go into what vehicle you can afford to purchase. Your purchase requires more than just the car price you negotiate. Your loan and monthly payment may include other fees associated with buying a car, such as:

  • Taxes
  • “Doc” fees and other dealer fees
  • Extended warranty

In addition, you need to factor in the costs of owning a car. Those costs include car insurance, gas, and maintenance and repair.

How much car payment can I afford?

Buying a car is one of the biggest purchases behind purchasing a home. So how much of a car payment you can afford is entirely up to what other factors come into play with your budget. Many personal finance experts suggest that your factor no more than 10% of your monthly take-home pay after taxes for your car budget. It’s wise to calculate your budget for a vehicle before you shop. That way, if you want to stretch a bit beyond your budget, you’ll know where you stand and how much wiggle room your bottom line allows. In the end, what you can afford is what feels most comfortable for you.

What car payment can I afford?

The rule of thumb is for car expenses to reach no more than 10% of your after-tax monthly income. Once you crunch the numbers, you can come up with the most comfortable car payment and one that works for your specific financial situation based on your budget and situation.