What is the 20/4/10 rule for car buying?

The 20/4/10 rule suggests: put down at least 20%, finance for no more than 4 years (48 months), and keep total transportation costs (payment, insurance, gas, maintenance) under 10% of gross income. This helps ensure you don't overspend on a vehicle.

How much should my car payment be based on income?

Financial experts recommend keeping your car payment under 15% of monthly take-home pay, or about 10% of gross income. For someone earning $5,000/month gross ($4,000 take-home), the payment should stay below $500-600. Total car ownership costs should be under 20% of income.

What is a good debt-to-income ratio for a car loan?

Lenders prefer a debt-to-income ratio under 36%, with no more than 28% going to housing. If your DTI is already 30%, adding a large car payment could make it difficult to qualify for other loans. Aim to keep total monthly debts under $1,800 on a $5,000 monthly income.

Car Affordability Calculator - How Much Car Can I Afford

How to Use the Car Affordability Calculator

This free car affordability calculator helps you quickly calculate maximum car price. Simply enter your values in the fields above and click "Calculate" to see your results instantly.

Understanding Your Results

After entering your information, the calculator will display your results including maximum car price, monthly payment, debt-to-income ratio. Each result is calculated using standard formulas used by financial professionals and experts in the field.

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