Car budget calculator

If you're wondering how much car you can afford, our car affordability calculator can help you figure out the most you can spend on a new car without breaking your budget. You should also consider other costs of ownership, such as insurance and regular maintenance.

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Car affordability calculator

Our calculator can help you figure out how much you should spend on a car based on your desired down payment, monthly payment, interest rate, and loan term.

This calculator is for illustrative and educational purposes only. Its accuracy and applicability to your circumstances is not guaranteed. You may wish to consult your own adviser regarding your particular circumstances.

How much car can I afford?

Experts suggest that you shouldn't spend more than 20% of your take-home pay towards monthly auto payments and related expenses. The exact amount you pay toward your auto loan each month comes down to three things:

  • Your down payment & trade-in: Your down payment is how much money you're paying out of pocket for your car. The more money you put down, the less you need to borrow and the lower your monthly payment will be. If you're trading in a car, its value is considered part of your down payment, so you don't have to put as much cash down.
  • Annual interest rate: Your interest rate is the cost of borrowing money. Your credit score has a big impact on the rate your lender will offer you, though market conditions can also affect the rate you get.
  • Loan term: This is how long your loan will last, ranging anywhere from 24 to 84 months long (two to seven years). A longer loan term may lower your monthly payment, but you'll typically pay more in interest.

Besides your monthly car payment, there are other costs of ownership to keep in mind, such as:

  • Insurance: Your insurance rate may change once you add your new car to your policy, but you can use your current rate for budgeting purposes.
  • Fuel & maintenance: Your fuel and maintenance costs may vary based on the type of car you buy, e.g., a full-size SUV will use more gas than a compact sedan. You should also consider the cost of regular maintenance, such as oil changes, tire rotations, etc.
  • Title, registration & taxes: Don't forget the initial title and registration fees you'll pay on your new car, plus any tax owed. AAA's 2022 Your Driving Costs study estimates that car owners pay $675 per year on license, registration, and taxes.

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