How to use the car affordability calculator
- Enter your gross income per year.
- Choose how much of your income all car costs can take: 10% (the 20/4/10 rule), 15% or 20% at most.
- Enter insurance and gas & maintenance per month.
- Add your down payment, trade-in value, the APR, the loan term and your sales tax.
The 20/4/10 rule
- 20% down so you don't owe more than the car is worth on day one.
- 4 years (48 months) at most, so you pay less interest and own the car sooner.
- 10% of gross income for all car costs, so the car doesn't crowd out saving.
It's a conservative rule. Many people stretch to 15% of income, which the calculator lets you test, but more than that usually means less saving and more stress.
How the loan term changes the price
Same $313 payment and $5,000 down at 7.5%:
| Term | Car price | Interest paid |
|---|---|---|
| 36 months | about $14,200 | about $1,200 |
| 48 months | about $16,900 | about $2,100 |
| 60 months | about $19,500 | about $3,200 |
| 72 months | about $21,800 | about $4,400 |
Longer loans let you buy more car with the same payment, but you pay much more interest and stay underwater longer. If you need 72 months to afford a car, it's usually a sign to look at a cheaper one.
The hidden costs of a car
- Insurance: can vary by hundreds a month between models and drivers.
- Gas or charging, maintenance and tires.
- Registration and taxes, often yearly.
- Depreciation: the value you lose every year you own it.
Total cost of ownership matters more than the sticker price or the payment.
Before you buy
- Get pre-approved for a loan at your bank or credit union.
- Negotiate the price, not the monthly payment.
- Check your budget: put the full car cost into the monthly budget calculator.
- Watch your debt-to-income ratio: a big car payment can reduce how much house you can borrow later; see the debt-to-income calculator.
- Compare loan offers with the personal loan calculator, which shows the real APR including fees.
Keep the car from wrecking the budget
Vault is a personal finance dashboard with a "can I afford it" check that tests a purchase against your bills, savings goals and safe-to-spend money. If you already have a car loan you'd like gone sooner, Zero turns your debts into a payoff plan with a debt-free date. Both have a free demo with sample data.
An estimate. Rates, insurance and prices vary; this isn't a loan offer.
Frequently asked questions
How much car can I afford on $70,000 a year?
What is the 20/4/10 rule for buying a car?
Is a 72-month car loan a bad idea?
Should I include insurance and gas?
New or used?
What APR should I expect on a car loan?
Written by
Finance Specialist & Editor, VaultlyApps
Emma Whitfield writes and edits the VaultlyApps money guides and free calculators. Her focus is US household finance — budgeting on a real paycheck, paying down credit card and student debt, emergency funds and savings goals, renting — and the money side of freelancing and small-business income, from pricing and profit margins to self-employment tax. Every guide is researched against primary sources such as IRS publications and the CFPB, every number is checked in our tested calculators, and tax content is reviewed each year when new IRS figures come out. Emma is not a licensed financial adviser or tax preparer; her work is general education, not personal advice.
Researched against primary US sources, checked against independent calculators and reviewed by a finance expert on our team. Written for US readers — general education, not financial, tax or legal advice. Editorial policy · Disclaimer
