Free Car Affordability Calculator

Car Affordability Calculator

Find out how much car you can really afford — by income or monthly budget — with total cost of ownership including insurance, fuel, and maintenance over 5 years.

20%
Max car price rule
of gross annual income
6.93%
Avg new car APR
Experian Q3 2025

Car Affordability Calculator

Car Affordability

Annual Gross Income
$
20% rule — max car price$15,000.00
15% rule — max payment$675.00/mo

Loan Details

Vehicle Type
Interest Rate (APR)
%
Loan Term
Down Payment
%
Trade-In Value
$

Monthly Ownership Costs

Insurance
$
Fuel
$
Maintenance & Repairs /mo avg
$

Enter your income or budget to see how much car you can afford

How Much Car Can I Afford? By Income

The 20% rule is the most common guideline — keep your car purchase under 20% of your gross annual income. Monthly, keep the loan payment under 15% of take-home pay:

Annual IncomeMax (20% Rule)Max PaymentSweet Spot
$40,000$8,000$380/moUsed compact car
$60,000$12,000$570/moUsed sedan or small SUV
$75,000$15,000$718/moUsed SUV or entry new
$100,000$20,000$957/moNew compact or used luxury
$150,000$30,000$1,436/moNew SUV or used luxury
$200,000$40,000$1,914/moNew luxury sedan or truck

Max payment assumes 60-month loan at 6.93% APR. Take-home assumes ~28% effective tax rate. Source: CFPB Auto Loans Guide.

Auto Loan Rates by Credit Score (2025)

Your credit score has a massive impact on auto loan rates — the difference between super prime and deep subprime on a $25,000 loan can be $4,000+ in extra interest:

TierFICO RangeNew RateUsed Rate
Super Prime781+5.25%7.06%
Prime661–7806.93%9.61%
Non-Prime601–6609.75%13.91%
Subprime501–60012.84%18.97%
Deep Subprime≤ 50014.18%21.32%

Source: Experian State of the Automotive Finance Market Q3 2025. Avg loan amounts: new $41,000, used $26,500.

New vs. Used — The Depreciation Reality

  • New cars lose 20–30% in year 1. A $35,000 car is worth $24,500–$28,000 after 12 months. You're financing that loss.
  • 2–3 year old CPO vehicles are the sweet spot. They've taken the big depreciation hit, often still have some warranty, and typically cost 25–35% less than new.
  • 0% APR makes new cars competitive. When manufacturers offer 0% financing, new cars can beat used financially — but compare carefully: the "deal" price may be higher to offset the 0% rate.
  • Avoid long-term loans (72–84 months). They lower the monthly payment but cost thousands more in interest and leave you underwater for years. Stick to 48–60 months max.
  • GAP insurance is smart for new cars. If you're putting less than 20% down on a new car, GAP insurance covers the difference between what you owe and what the car is worth if totaled.
FAQ

Car Affordability — Common Questions

How much car can I afford based on income?
Two common rules: (1) 20% rule: total car purchase price ≤ 20% of gross annual income. On $75,000 income: max car = $15,000. (2) 15% monthly rule: total car payment (loan only) ≤ 15% of monthly take-home pay. On $75,000 income after taxes (~$4,500/mo take-home): max loan payment = $675/mo. Use the more conservative number. Neither rule is law — they're guardrails against being car-poor.
What is the total cost of owning a car?
The loan payment is only 40–50% of what you actually spend. Full monthly ownership costs: loan payment ($350–$800), insurance ($100–$250), fuel ($100–$300), maintenance/repairs ($50–$150), registration ($20–$60/mo equivalent). Over 5 years on a $30,000 car: loan payments ~$28,000, insurance ~$10,000, fuel ~$12,000, maintenance ~$5,000 = $55,000+ total. New cars also depreciate $6,000–$10,000 in year 1 alone.
Is it better to buy new or used?
Financially, used almost always wins. New cars depreciate 20–30% the moment you drive off the lot. A 2–3 year old CPO vehicle has taken that hit, costs 25–35% less, and often has warranty coverage remaining. Exceptions where new makes sense: manufacturer offers 0% or very low APR financing, you want the latest safety features, or the specific vehicle has strong resale retention. The best value: 2–4 year old vehicles with 30,000–60,000 miles.
What credit score do I need for a good auto loan rate?
Super prime (781+): avg 5.25% new / 7.06% used. Prime (661–780): avg 6.93% / 9.61%. Non-prime (601–660): avg 9.75% / 13.91%. Subprime (501–600): avg 12.84% / 18.97%. Deep subprime (≤500): 14.18%+ / 21.32%+. Source: Experian State of Auto Finance Q3 2025. Improving your score 50+ points before buying can save thousands over the life of a loan.
How much should I put down on a car?
20% down is the traditional recommendation. This keeps you from being immediately underwater (owing more than the car is worth) and gets better loan terms. At minimum, put 10% down. Avoid 0% down on new cars — they depreciate so fast that you'll be significantly underwater for 2–3 years, creating a trap if you need to sell or the car is totaled. For used cars, 10–15% down is sufficient since depreciation is slower.
What are the best times to buy a car?
End of the month (dealers have quotas), end of the quarter (March, June, September, December), and end of the model year (August–October when new models arrive) are peak discount periods. Holidays like Presidents Day, Memorial Day, and Labor Day traditionally feature manufacturer incentives. Mondays and weekday mornings are best for negotiation — less foot traffic means more dealer attention.

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