Step 1: Choose a monthly budget
Start with the payment you want to stay under, before adding non-loan ownership costs.
Car affordability calculator
2026 car affordability calculator.
Start with a monthly payment budget and estimate how much vehicle price may fit after down payment, trade-in equity, APR, term, taxes, and fees.
Reverse payment formula
Front-end only
APR default: U.S. average
Updated August 13, 2026
Amortization preview
Your budget translated into a loan schedule.
Preview the first 12 payments or expand the full schedule to see how much of your target payment goes to principal and interest.
First payment
$0
Principal in first payment
$0
Interest in first payment
$0
Payoff
60 months
On small screens, swipe the table sideways to see every column.
| Month | Payment | Principal | Interest | Balance |
|---|
Direct answer
How much car can I afford?
You can estimate how much car you can afford by choosing a monthly payment budget, then reverse-calculating the largest loan balance that fits your APR and loan term. Add down payment and positive trade-in equity, then subtract financed taxes and fees.
This calculator focuses on loan affordability only. A payment that fits the calculator can still be too high if insurance, maintenance, fuel, registration, repairs, and emergency savings are not included in your household budget.
Calculation steps
Car affordability estimate, step by step.
Step 2: Enter APR and term
The calculator reverses the fixed-rate payment formula to estimate the largest loan balance that fits that payment.
Step 3: Add down payment
Cash paid upfront can increase the estimated vehicle price because less of the purchase needs to be financed.
Step 4: Add net trade-in equity
Trade-in value minus payoff can increase affordability when positive or reduce it when negative.
Step 5: Subtract financed taxes and fees
Costs rolled into the loan use part of the borrowing capacity, leaving less room for vehicle price.
Key definitions
Terms used in the calculator.
- Monthly payment budget:
- The payment amount you want the auto loan to stay near or below.
- Max amount financed:
- The estimated loan balance that fits the monthly budget, APR, and term.
- Trade-in value:
- The credit a dealer or buyer gives for your current vehicle.
- Net trade-in equity:
- Trade-in value minus any remaining payoff on the old vehicle loan.
- Affordable vehicle price:
- The estimated vehicle price after adding down payment and trade-in equity, then subtracting financed taxes and fees.
- APR:
- The annual percentage rate entered as the yearly borrowing rate for this estimate.
Formula source
Why this formula is reliable.
P = M x ((1+r)n - 1) / (r x (1+r)n)
P is the estimated amount financed, M is the target monthly payment, r is the monthly interest rate, and n is the number of payments.
This is the standard fixed-rate amortization payment formula rearranged to solve for principal instead of payment. It assumes constant monthly payments, a constant interest rate, and a zero balance after the last scheduled payment.
Worked example
What the default estimate means.
With a $550 monthly payment budget, 6.98% APR, and a 60-month term, the estimated loan balance that fits the payment is about $27,789.
Add a $5,000 down payment and $3,000 trade-in credit, then subtract $2,400 in financed taxes and fees. The estimated affordable vehicle price is about $33,389.
| Monthly payment budget | $550 |
|---|---|
| APR and term | 6.98% / 60 months |
| Max amount financed | $27,789 |
| Down payment | +$5,000 |
| Trade-in credit | +$3,000 |
| Taxes and fees financed | -$2,400 |
| Estimated affordable vehicle price | $33,389 |
Methodology
Transparent assumptions.
What is included
Monthly payment budget, APR, loan term, down payment, trade-in value, trade-in loan payoff, and any taxes or fees you choose to finance.
Default APR
The default 6.98% APR is a U.S. national reference rate for a 60-month new-car loan reported by WSJ Buy Side using Bankrate data in June 2026. It is used only as a starting point for the calculator.
What is not included
Insurance, registration renewal, fuel, maintenance, repairs, depreciation, late fees, lender fees not entered, dealer add-ons, or emergency savings.
How to use the result
Use the estimate as a planning range, then compare actual lender quotes and total ownership costs before choosing a vehicle.
FAQ
Car affordability questions.
How do I calculate how much car I can afford?
Choose a monthly payment budget, APR, and term. The calculator estimates the largest amount financed that fits those inputs, then adjusts for down payment, trade-in equity, and financed taxes or fees.
Should I use monthly payment or total car price?
Use both. Monthly payment shows cash-flow pressure, while total vehicle price and total interest show the long-term cost. A lower monthly payment can still be expensive if the term is long.
Does a down payment increase affordability?
Yes. A larger down payment can increase the vehicle price that fits the same loan payment because it reduces the amount that must be financed.
How does negative equity affect affordability?
Negative equity reduces affordability because the old loan shortfall may be rolled into the new loan. Use the negative equity car loan calculator to test that scenario directly.
Does this calculator include insurance?
No. This calculator estimates loan affordability only. Insurance, fuel, maintenance, registration, repairs, and depreciation should be budgeted separately.
Can a longer term make more car affordable?
A longer term can increase the estimated vehicle price for the same monthly payment, but it usually increases total interest and can raise negative equity risk. Compare with the 72 month auto loan calculator.