Work backwards from a comfortable monthly payment to find the max car price you can afford.
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%
$
Max Car Price
$27,862.78
Loan + down payment
Max Loan Amount
$25,862.78
Before down payment
Excludes taxes, registration, and dealer fees. Budget 15-30% extra on top of your payment for insurance, fuel, and maintenance.
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Total Payments
$30,000
60 months
Total Interest
$4,137.22
Over the loan term
Results are estimates only and should not be considered financial advice. Always consult a qualified professional before making financial decisions.
Formula
PV = M × (1 − (1+r)^−n) / r, where M is the monthly payment, r is the monthly rate, and n is the number of months. Car price = loan + down payment.
Worked Example
With a $500 monthly budget at 6% over 60 months and a $2,000 down payment: max loan ≈ $25,862, max car ≈ $27,862.
Frequently Asked Questions
How much car can I afford?
As a general rule, your total car payment should not exceed 10-15% of your gross monthly income, and the loan term should stay under 60 months to avoid negative equity. This calculator works backwards from your budgeted payment to find the maximum loan and sticker price.
Should I include a down payment?
Yes. A larger down payment reduces the amount you finance and can lower your interest rate. A healthy down payment is 20% of the car's price, though 10% is common. Every dollar down is a dollar you do not pay interest on.
What costs should I budget beyond the monthly payment?
Insurance, fuel, maintenance, registration, and taxes usually add 15-30% on top of your payment. Many experts suggest your total car-related costs (payment, insurance, fuel) stay under 20% of gross monthly income.
Is a longer loan term better?
Longer terms lower your monthly payment but increase total interest and raise the risk of being 'underwater' (owing more than the car is worth). A shorter term with a payment you can afford is almost always the smarter choice.