Enter your monthly budget, loan terms, and cash down to estimate the highest vehicle price that fits your plan.
Advanced options
Tax and fixed fees are included in the loan unless you change this choice in Advanced options.
This is a planning estimate, not a lender offer. The treatment of entered tax and fixed fees follows your choice above.
This is the level monthly principal-and-interest payment supported by the budget.
This includes only the recurring costs entered here. Parking, tolls, and other omitted costs are not added.
This is the starting loan balance before interest accrues.
Table of contents
How to use our Car Affordability Calculator
- Choose Payment budget if your limit is only for the loan payment, or All-in monthly budget if it must also cover regular car costs.
- Enter the monthly limit, Loan APR, Loan term, and planned Cash down payment.
- For the all-in budget, enter monthly amounts for Insurance, Fuel or charging, and Maintenance and repairs.
- Open Advanced options to add trade-in details, sales tax, and fixed fees, then choose whether tax and fees will be financed or paid at purchase.
- Check that the estimated monthly loan payment and cash needed at purchase fit your real spending plan before using the estimated vehicle price as a shopping limit.
Definitions
APR: Annual percentage rate. This is the annual interest rate used for the loan; the calculator converts it to a monthly rate.
Amount financed: The starting loan balance supported by the monthly loan budget before interest is added.
Cash down payment: Cash paid toward the purchase. It does not include trade-in equity.
Net trade-in equity: Trade-in value minus the amount still owed on that vehicle. A negative amount means the payoff is higher than the trade-in value.
Sales tax rate: The percentage used in this estimate to calculate tax on the solved vehicle price.
All-in monthly car cost: The loan payment plus the monthly insurance, fuel or charging, and maintenance amounts entered in the calculator.
Common mistakes and quick fixes
Mistake: Treating the total car budget as money available only for the loan.
Fix: Check Choose your monthly limit and then recalculate. Use All-in monthly budget and enter insurance, fuel or charging, and maintenance so those costs are reserved first.
Mistake: Entering a monthly interest rate as the Loan APR.
Fix: Enter the annual percentage from the lender. For a 6.5 percent annual APR, enter 6.5.
Mistake: Combining trade-in value with the amount still owed on the trade.
Fix: Enter both amounts separately. Net trade-in equity is negative when the payoff is greater than the trade-in value.
Mistake: Entering sales tax as a fixed fee.
Fix: Check Choose your monthly limit and then recalculate. Put percentage tax in Sales tax rate and enter only fixed dollar charges in Title, registration, and other fixed fees.
Mistake: Planning only for the cash down payment.
Fix: Check Choose your monthly limit and then recalculate. If tax and fixed fees are paid at purchase, add them to your cash down payment when checking cash needed at purchase.
Mistake: Shopping up to the estimated vehicle price without checking interest.
Fix: Check Choose your monthly limit and then recalculate. Compare the estimated total loan interest and monthly loan payment with the amount you are comfortable paying over the full term.
Limitations & Key Assumptions / Boundary Conditions
- This is a planning estimate, not a lender approval, dealer quote, or promise of a vehicle price.
- The loan model assumes equal monthly principal-and-interest payments, with no late charges, extra payments, refinancing, or optional loan products.
- The entered annual APR is divided by 12 to estimate a monthly rate. A lender's payment can differ because of contract terms and rounding.
- Sales tax is calculated as the entered rate times the vehicle price. Local tax rules, trade-in tax credits, rebates, tax caps, and fee tax treatment are not modeled.
- The all-in monthly cost includes only insurance, fuel or charging, and maintenance entered by the user. It does not add parking, tolls, registration, inspections, depreciation, or other costs.
- Trade-in value and payoff can change before purchase. Negative trade equity reduces the vehicle price that fits the same budget.
Methodology
How the estimate works
The calculator first finds the monthly amount available for principal and interest. In Payment budget mode, it uses the entered loan-payment limit. In All-in monthly budget mode, it subtracts the entered insurance, fuel or charging, and maintenance amounts from the total car budget.
ρ (monthly interest rate) = APR / (12 * 100)
APR is entered as an annual percent, so 6.5 means 6.5 percent per year. The calculator divides by 12 and by 100 to make a monthly decimal rate.
loan budget = payment limit, or total car budget - monthly ownership costs
factor = n (number of monthly payments) when ρ = 0; otherwise (1 - (1 + ρ)^(-n)) / ρ
amount financed = loan budget * factor
The factor converts a level monthly payment into the starting loan balance it can support. At 0 percent APR, the supported balance is the monthly payment times the number of payments.
net trade-in equity = trade-in value - amount owed on trade-in
vehicle price = (amount financed + cash down + net trade-in equity - fixed fees) / (1 + sales tax rate / 100)
This vehicle-price formula is used when tax and fixed fees are financed. When they are paid at purchase, the estimated vehicle price is amount financed plus cash down plus net trade-in equity, while tax and fixed fees are included in cash needed at purchase.
total loan interest = monthly loan payment * n - amount financed
Worked example
With a $500 monthly loan budget, a 60-month term, 0 percent APR, and $5,000 cash down, the amount financed is $500 times 60, or $30,000. With no trade equity, tax, or fees, the estimated affordable vehicle price is $35,000.