Car affordability calculator
Estimate the car price that fits your income using the 20/4/10 guideline.
How it works
The 20/4/10 guideline limits total car costs to about 10% of gross income. We subtract running costs from that limit to find the loan payment, then work out the loan size and car price it supports.
It’s a conservative guideline, not a rule. Sales tax, fees, and trade-in value are not included.
Example
With the sample inputs shown above (Gross monthly income ($) = 6000; Down payment ($) = 4000; Loan APR (%) = 7; Loan term (years) = 4; Insurance, fuel, and upkeep per month ($) = 350), the calculator returns: Max loan payment: $250 (After running costs); Max loan: $10,440; Max car price: $14,440 (With $4,000 down).
Things to know
The 20/4/10 guideline is conservative. Insurance, fuel, and maintenance count toward the 10%. If the result is lower than the cars you are considering, try a larger down payment or a shorter list of options.