How much car can I afford — by salary
This chart shows the most car you could buy at three budget levels. It assumes $250 a month for insurance and gas, $5,000 down, and a 48-month loan at 7% APR. Your numbers will change with your own rate, down payment, and costs.
Car price you can afford by yearly income
| Yearly income | 10% (careful) | 15% (middle) | 20% (stretch) |
|---|
| $30,000 | $5,000 | $10,200 | $15,400 |
| $40,000 | $8,500 | $15,400 | $22,400 |
| $50,000 | $12,000 | $20,700 | $29,400 |
| $60,000 | $15,400 | $25,900 | $36,300 |
| $70,000 | $18,900 | $31,100 | $43,300 |
| $80,000 | $22,400 | $36,300 | $50,200 |
| $90,000 | $25,900 | $41,500 | $57,200 |
| $100,000 | $29,400 | $46,800 | $64,200 |
| $120,000 | $36,300 | $57,200 | $78,100 |
| $150,000 | $46,800 | $72,900 | $99,000 |
For example, on a $60,000 salary, 15% of your gross pay is $750 a month. After $250 for insurance and gas, that leaves $500 for the car payment. That payment covers a loan of about $20,900, so with $5,000 down you could afford a car of about $25,900.
The 20/4/10 rule
A popular rule of thumb is to put 20% down, borrow for 4 years or less, and keep total car costs under 10% of your gross income. It's the "careful" setting above. It can feel strict, but it leaves room in your budget for savings and surprises. For more on the full cost of owning a car, see how much to spend on a car.
Why loan length changes what you can afford
The same monthly payment buys more car on a longer loan, which is why dealers like to offer 72 or even 84 months. But you pay more interest, and the car loses value faster than you pay it down. Here's what a $500 payment at 7% buys at each term:
Loan amount a $500/month payment covers at 7% APR
| Term | Loan amount | Total interest |
|---|
| 36 months | $16,200 | $1,800 |
| 48 months | $20,900 | $3,100 |
| 60 months | $25,300 | $4,700 |
| 72 months | $29,300 | $6,700 |
Going from 48 to 72 months lets you borrow more, but you'll pay much more interest and carry the loan two extra years. Read is a 72-month car loan a bad idea? before you sign up for a long loan.
Common questions
How much car can I afford on $50,000 a year?
If you keep total car costs (payment, insurance and gas) to 15% of your gross income, $50,000 a year gives you about $625 a month. After $250 for insurance and gas, that leaves about $375 for the payment. With $5,000 down and a 48-month loan at 7%, that's a car of about $20,700.
How much car can I afford on $100,000 a year?
At 15% of gross income, $100,000 a year gives you about $1,250 a month for car costs. After $250 for insurance and gas, that's about $1,000 for the payment. With $5,000 down and a 48-month loan at 7%, that's a car of about $46,800.
What is the 20/4/10 rule for buying a car?
The 20/4/10 rule says to put at least 20% down, finance the car for no more than 4 years (48 months), and keep your total monthly car costs, including insurance and gas, under 10% of your gross income. It is a careful rule that keeps a car from crowding out savings and other goals.
How much should my car payment be?
Many money experts suggest keeping all your car costs, including insurance and gas, to about 10% to 15% of your gross income. Your car payment alone should be less than that, since insurance and gas come out of the same budget.
Should I count insurance and gas in my car budget?
Yes. Insurance, gas, and upkeep can add hundreds of dollars a month on top of the loan payment. A payment that looks affordable on its own can be too much once those costs are added in.
Does the car price include sales tax and fees?
No. The price this calculator shows is before sales tax, registration, and dealer fees. Those often add several percent to the price, so aim a little below your result, or cover them with your down payment.
Sources and further reading
For independent, authoritative information on this topic, these are good places to start:
Results are estimates for planning purposes and are not financial advice. A qualified professional can provide figures specific to your situation.