Car Affordability Calculator
Find the most car you can afford under the 20/4/10 guideline or a take-home pay budget — with sales tax, fees, your trade-in, insurance and fuel all counted before the loan gets a dollar.
How much car can you afford? Three ways to set a budget
A loan approval shows what a lender will finance, not what fits your budget, and long terms make expensive cars look cheap: Experian’s second-quarter 2026 data shows an average new-car term of 69.5 months and average APRs of 6.35% (new) and 11.19% (used). Rules of thumb push back against that. None is a law or a lender requirement.
20/4/10. As Chase describes it: at least 20% down, a loan of no more than four years, and transportation costs — payment, insurance, maintenance and fuel — under 10% of gross monthly income. Capital One notes the rule doesn’t specify gross or take-home income, and that it covers taxes and fees but not depreciation.
Take-home. Experian suggests a car payment at or below 10% of take-home pay and total transportation costs at or below 15%; this preset uses the 15% total. It matches 20/4/10 when take-home pay is two-thirds of gross and is stricter if more goes to taxes and deductions. Custom accepts any percentage of either income type.
How to use the calculator
Pick a rule, then enter your income (per year or month, gross or take-home), down payment, trade-in value after any payoff, APR, term, combined sales tax rate, fees, and monthly insurance plus fuel and maintenance. Running costs come out of the budget first; the loan payment gets the rest.
“Trade-in reduces taxable price” taxes only the price minus the trade-in, as Texas does; untick it where the full price is taxed — California’s tax agency says dealers can’t deduct the trade-in allowance. “Require 20% down” caps the price at five times your cash plus trade-in. Presets set the percentage, income type, term and 20% switch, and you can change any of them.
Defaults are illustrative: a 6.5% APR is near Experian’s new-car average, and 7.5% sales tax is close to the Tax Foundation’s mid-2026 average combined rate of 7.53%.
How the maximum price is calculated
Budget: budget % × monthly income, minus insurance and fuel and maintenance, is the room for a loan payment. Largest loan: room ÷ k, where k = r ÷ (1 − (1 + r)−n) for monthly rate r over n months (1 ÷ n at 0% APR).
Price: loan = price + sales tax + fees − down payment − trade-in. With the trade-in credit, tax = tax rate × (price − trade-in), so price = (max loan + down + trade-in + tax rate × trade-in − fees) ÷ (1 + tax rate); without it, price = (max loan + down + trade-in − fees) ÷ (1 + tax rate). The price is rounded down to the cent and capped at five times your cash plus trade-in if the 20% switch is on; the payment at that price equals the room.
Sticker vs. out-the-door: the headline maximum is the negotiated price before tax and fees; the out-the-door price adds them and is what you actually pay.
A worked example
Defaults: $75,000 gross income, 20/4/10, $6,000 down, a $4,000 trade-in, 6.5% for 48 months, 7.5% tax with trade-in credit, $800 of fees, and $150 of insurance plus $200 of fuel and maintenance a month.
The budget is 10% × $6,250 = $625. Running costs take $350, leaving $275, which repays $11,596 over 48 months at 6.5%. The maximum price is $19,624: tax on $19,624 − $4,000 is $1,171.82, the out-the-door price is $21,596, and after $10,000 of cash and trade-in you finance $11,596 at $275.00 a month with $1,604 of interest. Cash and trade-in cover 51.0% of the price.
Without the trade-in credit the budget buys $19,345. A 60-month term buys $21,911 but breaks the four-year rule and costs $2,445 in interest. On the take-home preset with the same cash, rate and term, $4,800 a month of take-home pay gives a $720 budget, $370 of payment room and a $23,350 maximum with the 20% switch off.
Car price you can afford by income
The 20/4/10 preset at eight gross incomes, other inputs as in the example. The last column is the common misreading: spending the whole 10% on the payment.
| Gross income | Monthly budget (10%) | Loan payment | Max vehicle price | Out-the-door | Payment-only reading |
|---|---|---|---|---|---|
| $40,000 | $333 | $0 | — | — | $21,912 |
| $50,000 | $417 | $67 | $11,452 | $12,811 | $25,181 |
| $60,000 | $500 | $150 | $14,721 | $16,325 | $28,449 |
| $75,000 | $625 | $275 | $19,624 | $21,596 | $33,353 |
| $90,000 | $750 | $400 | $24,527 | $26,867 | $38,256 |
| $100,000 | $833 | $483 | $27,796 | $30,381 | $41,525 |
| $125,000 | $1,042 | $692 | $35,968 | $39,166 | $49,697 |
| $150,000 | $1,250 | $900 | $44,140 | $47,951 | $57,869 |
At $40,000 the $333 budget doesn’t cover $350 of running costs, so no loan fits. Wherever a loan does fit, counting those costs cuts the affordable price by about $13,700.
Tips and limitations
- Get pre-approved so the APR you enter is real.
- Quote insurance before choosing a model; premiums vary widely by vehicle, driver and ZIP code.
- Budget for full ownership. AAA puts the 2026 average cost of owning and operating a new vehicle at $12,863 a year over five years and 15,000 miles a year, including depreciation and finance charges.
- Owe more than your trade-in is worth? Enter $0 for the trade-in and add the shortfall to fees.
- Not modeled: rebates, dealer add-ons, credit-score pricing, value-based vehicle taxes and leases.
Frequently asked questions
What is the 20/4/10 rule for buying a car?
It’s a personal-finance guideline, not a lender requirement: put at least 20% down, finance for no more than four years, and keep total monthly transportation costs, meaning the loan payment plus insurance, fuel and maintenance, under 10% of your monthly income. The down payment and short term limit interest and make it less likely you’ll owe more than the car is worth.
Should the 10% be based on gross or take-home pay?
Chase describes the 10% as a share of gross monthly income, before taxes. Capital One points out that the rule itself doesn’t say, so you can use either, and take-home pay is the stricter choice. Experian’s alternative uses take-home pay with a 15% limit for total transportation costs. The calculator lets you pick either income type with any percentage.
How much car can I afford making $75,000 a year?
Under 20/4/10 with $6,000 down, a $4,000 trade-in, a 6.5% APR over 48 months, 7.5% sales tax, $800 of fees, $150 a month of insurance and $200 of fuel and maintenance, the maximum vehicle price is about $19,624. That keeps the $275 loan payment plus running costs at $625 a month, 10% of gross income. Leaving insurance and fuel out of the budget would suggest about $33,353, which overstates what the rule allows.
Does the maximum price include sales tax and fees?
No. The headline maximum is the vehicle’s price before tax and fees, the figure you negotiate with a dealer. The calculator adds sales tax and fees to get the out-the-door price, subtracts your down payment and trade-in, and finances the rest, so tax and fees still count against your budget.
Does a trade-in lower the sales tax?
It depends on your state. Some states, such as Texas, tax only the price after the trade-in allowance, while others, such as California, tax the full selling price. Tick or untick “Trade-in reduces taxable price” to match your state. With the calculator’s defaults, losing the credit lowers the maximum price from about $19,624 to $19,345.
Is a 60- or 72-month car loan a bad idea?
A longer term lowers the payment, so the same budget buys more car, but you pay more interest and stay in debt longer on a vehicle that is losing value. With the defaults, stretching from 48 to 60 months raises the maximum price from about $19,624 to $21,911 and total interest from about $1,604 to $2,445.
Sources & references
- Chase — The 20/4/10 rule for buying a car — 20% down, four-year maximum, transportation costs under 10% of gross monthly income.
- Capital One — What is the 20/4/10 rule? — the rule doesn’t specify gross or net income; costs include insurance, maintenance, taxes and fees, fuel and the payment, not depreciation.
- Experian — How much car can I afford? — car payment at or below 10% and total transportation costs at or below 15% of take-home pay.
- Experian — Auto loan rates and financing — Q2 2026 average APRs (6.35% new, 11.19% used) and terms (69.5 months new).
- Tax Foundation — State and local sales tax rates, midyear 2026 — 7.53% population-weighted average combined rate; states without a statewide sales tax.
- California Department of Tax and Fee Administration — Tax guide for motor vehicle dealers — trade-in allowances can’t be deducted from the taxable selling price.
- Texas Comptroller — Motor vehicle tax guide: trade-ins — motor vehicle sales tax applies to the sales price minus the trade-in allowance.
- AAA — Your Driving Costs 2026 — $12,863 average annual cost to own and operate a new vehicle over five years and 75,000 miles.
Last updated: September 2026 · How we calculate
BriskToolbox provides estimates for general information only and is not financial advice. Budget rules are guidelines; confirm the price, taxes, fees and loan terms with your dealer or lender.