Car Affordability Calculator
There’s nothing worse than falling in love with a car, then finding out that you can’t actually afford it. Our car affordability calculator shows you exactly what monthly payment fits your budget so you can be prepared when shopping for a new or used vehicle.
Input your target monthly payment, loan term, credit score, down payment, trade-in value, and sales tax rate to discover the maximum vehicle price you can realistically handle without breaking your bank account.
As experienced auto brokers, we’ve watched too many buyers get swept up in the excitement and drive off the lot with payments that crush their monthly budget. Use our calculator to set firm boundaries, then let our expert auto brokers find vehicles within your range while you avoid the financial stress entirely. When you know your limits, nobody can push you past them.
Disclaimer: This calculator provides estimates only and assumes standard lending practices. Actual affordability can vary significantly based on numerous factors including your debt-to-income ratio, employment history, existing monthly obligations, insurance costs, maintenance expenses, and individual lender requirements. Use these estimates as a starting point for budget planning, not as guaranteed financing amounts.
California Affordability Guide: Financial experts recommend spending no more than 10-15% of your take-home pay on your monthly car payment, and no more than 20% on total vehicle expenses including insurance and maintenance.
How Our Affordability Calculator
Determines Your Budget
Most shoppers wanlk into dealerships with no clue what they can actually afford, and dealers love exploiting that. Our affordability calculator gives you the tools you need by starting with your budget reality and working backwards to show you what’s actually possible.
Let’s walk through a real-world example using a $450 target monthly payment budget. Say you have good credit (670-739), want a 60-month loan on a used car, can put $3,000 down, and have a trade-in worth $2,000. Based on your credit tier, you’ll likely get around 6.5% APR on that used car loan.
Step 1: Calculate Your Maximum Loan Amount
Start with your monthly payment and work backward using the loan formula. With a $450 payment, 6.5% APR (0.54% monthly rate), and 60-month term, you can finance approximately $23,850.
This is the maximum amount a lender will give you based on your payment capacity.
Step 2: Add Your Cash to the Equation
Add your down payment and trade-in value to your loan amount: $23,850 + $3,000 + $2,000 = $28,850
This gives you your pre-tax purchasing power.
Step 3: Account for Sales Tax
As an example, LA County’s sales tax rate is 10.25%. Since you pay tax on the full vehicle price, divide your total by 1.1025: $28,850 ÷ 1.1025 = $26,180
Step 4: Your Maximum Vehicle Price
You can afford a vehicle priced up to $26,180. Anything above this pushes your monthly payment over $450 or requires you to put more money down.
The math doesn’t lie, even when dealers try to make it seem like you can “afford” more by stretching the loan term or inflating your trade-in value. Stick to your numbers, and you’ll drive away with a payment that actually fits your life.
