Car Affordability Calculator — How Much Car Can I Afford? 2026
How much car you can afford from your income, take-home pay, debts, down payment and credit score: 20/4/10 rule and 10/15/20% take-home rules compared, Experian 2026 average APRs, state sales tax, debt-to-income check and total interest.
| Monthly payment budget | — |
|---|---|
| Loan amount | — |
| Down payment + trade-in | — |
| Sales tax included | — |
| APR and term | — |
| Total interest | — |
| Debt-to-income after the loan | — |
| All-in car cost per month | — |
| Price as a share of income | — |
In short
A sustainable car payment is 10–15% of take-home pay (20% at a stretch) with total debts under 36% of gross income; the stricter 20/4/10 rule asks for 20% down, a four-year loan and all car costs under 10% of gross. Someone earning $78,000 with $4,800 monthly take-home, $8,000 of cash and trade-in and prime credit (6.15%) can afford about a $41,700 car on a $720 payment over 60 months, or about $22,000 under 20/4/10. The average new-car loan in early 2026 was $43,925 at $770 a month.
Who this is for: Car buyers setting a realistic budget before visiting a dealer, and anyone checking whether a payment they have been offered fits their income.
How much car can you afford? The rules of thumb explained
Lenders will often approve a bigger loan than is wise — they look at debt-to-income (total debts under about 36–43% of gross) and credit score, not at whether you can still save. The budget rules work the other way round, from your pay: the 20/4/10 rule (20% down, no more than four years, all car costs — payment, insurance, fuel — under 10% of gross income) is the strictest; the common take-home rules cap the payment alone at 10% (conservative), 15% (moderate) or 20% (stretch) of net pay; and the income-share rule says the price should stay under 35% of annual gross income (50% if you have no other debt and a long commute to justify it).
The calculator turns the chosen rule into a maximum payment, applies the DTI cap, converts it to a loan at the average APR for your credit tier (Experian Q2 2026: 4.4% new / 6.3% used super prime, 6.2% / 8.8% prime, 9.7% / 13.9% near prime, 13.5% / 19.1% subprime) over the term you pick, adds your cash and trade-in, and backs out your state's sales tax — the result is the sticker price to shop for. Every approach is shown side by side so you can see what a longer term or bigger down payment buys.
| Rule | What it limits | Typical result on $78,000 gross / $4,800 take-home |
|---|---|---|
| 20/4/10 | Payment + running costs ≤ 10% of gross, 48 months, 20% down | ≈ $22,000 car |
| 10% of take-home | Payment ≤ $480 | ≈ $30,000 (60 mo, 6.15%) |
| 15% of take-home | Payment ≤ $720 | ≈ $41,700 |
| 20% of take-home | Payment ≤ $960 | ≈ $53,100 |
See also: Car Payment Calculator, Auto Loan Refinance Calculator, Car Lease vs Buy Calculator, Sales Tax Calculator by State, Debt-to-Income Ratio Calculator.
Assumptions
- Payment budget = chosen share of take-home pay (10/15/20%) or, for 20/4/10, 10% of gross monthly income minus running costs over 48 months; then capped so all debts stay under 36% of gross income.
- Loan = present value of the payment at the APR (Experian Q2 2026 average for the credit tier and new/used, or your own) over the term; price = (loan + down payment + trade-in) ÷ (1 + state average sales tax).
- Title, registration, dealer fees, insurance premium changes and trade-in tax credits are not modelled.
Worked example
Moderate budget = 15% × $4,800 = $720 a month; debt-to-income after the loan = ($450 + $720) ÷ $6,500 = 18%, well under 36%. A $720 payment at 6.15% over 60 months supports a loan of $37,108; add $8,000 of cash and trade-in = $45,108, and remove Texas sales tax (÷ 1.082) → a sticker price of about $41,700, with roughly $3,400 of tax and $6,090 of interest. The conservative rule gives ≈$30,300, the stretch rule ≈$53,100, and the 20/4/10 rule only ≈$22,100 ($650 − $275 running costs = $375 over 48 months), capped further by its 20% down requirement ($8,000 ÷ 0.20 = $40,000, not binding here).
Frequently asked questions
What is the 20/4/10 rule?
Put 20% down, finance for no more than four years, and keep total car costs — payment, insurance and fuel — under 10% of gross income. It is the most conservative rule and rules out most new cars for median earners.
How much of my salary should a car payment be?
Common advice is 10–15% of take-home pay for the payment, or under 20% including insurance and fuel. Lenders look at total debt payments under 36–43% of gross income instead.
Is a 72- or 84-month car loan a bad idea?
Longer terms cut the payment but you pay more interest, carry negative equity longer and may still owe money when repairs start; about a third of 2026 loans run past six years. Prefer 48–60 months and a cheaper car.
How much should I put down on a car?
At least 10–20% on a new car and 10% on a used one, enough to cover tax, fees and the first-year depreciation so the loan never exceeds the car's value.
Does credit score change what I can afford?
Yes, through the APR: on a $37,000 loan over 60 months, 6.15% (prime) costs about $6,070 in interest while 13.52% (subprime) costs $14,100 — $134 a month more for the same car.
Should I include sales tax in the price?
Yes — most states charge 4–10% on the purchase (often after trade-in credit), plus title and registration. The calculator removes the tax so the figure shown is the sticker price to negotiate.
People also ask
How much car can I afford on a $60,000 salary?
About $25,000–$32,000 under the 15% take-home rule (a payment near $560 with average take-home), or $21,000 under the 35%-of-income rule; the 20/4/10 rule points to under $20,000.
How much car can I afford on $100,000 a year?
Roughly $40,000–$50,000 with a 15% take-home payment, or up to $35,000 by the 35%-of-income rule; a $50,000 car at 6% over 60 months is a $900+ payment.
What car can I afford with a $500 monthly payment?
At 6.15% over 60 months, $500 supports a loan of about $25,800 — so a $30,000 car with $4,000 down and no tax, or about $28,000 after 8% sales tax.
What is the average car payment in 2026?
$770 a month for new vehicles and $531 for used (Experian Q1 2026), on average loans of $43,925 and $27,070 over about 69 and 68 months.
What APR can I get on a car loan with a 700 credit score?
Prime tier (661–780) averaged 6.15% on new and 8.81% on used loans in Q2 2026; a 720–740 score often qualifies for manufacturer promotional rates on new cars.
How much income do I need for a $40,000 car?
Around $90,000–$100,000 gross under the 15% take-home rule with a typical down payment, or $115,000 under the 35%-of-income rule.
Is it better to put more money down or pay off the car faster?
Both reduce interest; a bigger down payment also avoids negative equity from day one and lowers the payment, so it is usually the better first move, then shorten the term as far as the payment allows.
What is a good debt-to-income ratio for a car loan?
Under 36% total (all debts including the new payment) is comfortable; most auto lenders approve up to 45–50% but the higher the ratio the worse the rate.
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