Work backward from a comfortable monthly payment to the price you can afford.
How this is calculated Embed on your siteUpdated October 2026
This calculator works backward from the monthly payment you are comfortable with to the most expensive car that payment can buy. With the defaults, $500 a month for 60 months at 7.2% APR, plus $3,000 down and 6.5% sales tax, supports a car priced at about $26,400. Add your income and it also checks the result against the 20/4/10 rule, a common guideline for keeping a car from crowding out the rest of your budget.
Dealers like to talk about monthly payments because a longer loan makes almost any car look affordable. Turning that around and deciding on the payment first puts you in control. The calculator finds the largest loan your payment can repay at your rate and term, adds your down payment, and backs out sales tax, which is usually rolled into the loan.
The term is where the trade-off hides. The same $500 payment buys very different cars depending on how long you stretch it, and the extra years cost real money:
| Loan term | Max loan | Max car price | Total interest |
|---|---|---|---|
| 36 months | $16,145 | $17,977 | $1,855 |
| 48 months | $20,799 | $22,347 | $3,201 |
| 60 months | $25,131 | $26,414 | $4,869 |
| 72 months | $29,163 | $30,200 | $6,837 |
| 84 months | $32,915 | $33,723 | $9,085 |
$500 a month, 7.2% APR, $3,000 down, 6.5% sales tax.
Going from 60 to 84 months lets you buy a car about $7,300 more expensive, but nearly doubles the interest. Long loans also leave you owing more than the car is worth for years, which becomes a problem if it is totaled or you want to trade it in early.
The 20/4/10 rule is a simple test for whether a car fits your finances:
On a $75,000 salary, 10% is $625 a month. With 20% down, a 48-month loan at 7.2%, and 6.5% sales tax, that points to a car around $30,000. The calculator shows this ceiling next to your own plan so you can see how far apart they are. Plenty of people buy above the guideline and do fine; it is most useful as a warning when your plan lands well outside it.
Your credit score largely sets your APR, and the difference adds up. On a $30,000 loan over 60 months:
| APR | Monthly payment | Total interest |
|---|---|---|
| 5% | $566 | $3,968 |
| 7.2% | $597 | $5,812 |
| 9% | $623 | $7,365 |
| 12% | $667 | $10,040 |
| 15% | $714 | $12,822 |
Getting preapproved by a bank or credit union before you shop gives you a rate to compare against the dealer's offer. If the dealer is advertising 0% financing, our 0% financing vs rebate calculator shows whether the cash rebate is the better deal.
A car that fits the payment can still strain your budget once everything else is added. Before you commit, price out:
Once you have a price range, run a specific car through the auto loan calculator to see the exact payment with your trade-in and sales tax. If you are deciding between leasing and buying, the lease vs buy calculator compares the total cost of each.
A common guideline is to keep the car payment at or below 10% of your gross monthly income, with 20% down and a loan of four years or less. On a $75,000 salary that is about $625 a month, or a car around $30,000 at a 7.2% rate.
Put at least 20% down, finance for no more than 4 years, and keep the car payment under 10% of your gross monthly income. Some versions include insurance and fuel inside the 10%.
It lowers the monthly payment but adds thousands in interest and keeps you owing more than the car is worth for longer. In the example above, an 84-month loan costs $9,085 in interest compared with $4,869 over 60 months.
Most buyers roll sales tax into the loan, which is what this calculator assumes. Paying it in cash lowers the loan amount and the interest you pay.
Twenty percent is a solid target because it helps you avoid owing more than the car is worth early in the loan. Even a smaller down payment lowers your payment and total interest.
Formula and a worked example are on our methodology page. Estimates only; your lender's terms, fees and taxes will differ.