Dealers will happily approve you for far more car than you can comfortably afford — their question is “can you make the payment?”, not “will this payment wreck your month?”. This calculator uses the budgeting rules financial planners actually recommend (the 20/4/10 rule and the 15% take-home rule) to turn your real income into a sensible car budget, including insurance and fuel.
How Much Car Can I Afford?
The 20/4/10 rule, explained
Put at least 20% down so you’re never badly underwater, finance for no more than 4 years so the interest stays small and the car outlives the loan, and keep total car costs — payment, insurance and fuel — under 10% of your gross income. Almost nobody follows it strictly in 2026 (the average new-car loan is 68 months), which is exactly why so many buyers end up with $900 payments on cars worth less than they owe. Use it as a ceiling, not a target.
What to do with the number
- Get pre-approved at a credit union for that amount before you shop — it turns the negotiation into a cash deal.
- Shop 2–4-year-old cars first: the same budget buys a much better car once someone else has eaten the first-year depreciation.
- Run your shortlist through the true cost of ownership calculator — insurance alone can swing the monthly cost by $100.
For salary-by-salary examples and the mistakes that push people over budget, read How Much Car Can I Really Afford?.