Car Loan Affordability

Free Car Loan Affordability calculator with clear step-by-step results.

About Car Loan Affordability

Runs the loan formula backwards: instead of asking what a car costs per month, it asks how much car a given monthly payment buys. The present value of your payment stream is the maximum loan, and adding your down payment and trade-in equity gives the price ceiling to shop against.

Formulas

Maximum loan

Loan = payment x (1 - (1 + r)^-n) / r

Price ceiling

Price = maximum loan + down payment + trade-in equity

Worked example

With the default values below, Car Loan Affordability returns Vehicle price you can afford of $27,457.39. Change any input above and every figure here is recalculated in your browser.

Inputs used

Monthly payment you can affordminimum 1 $: 450 $
Loan APRaccepts 0–40 %: 7.5 %
Loan termaccepts 6–120 months: 60 months
Cash down paymentminimum 0 $: 3,000 $
Trade-in equityminimum 0 $: 2,000 $

Results

Vehicle price you can afford: $27,457.39
Maximum loan this payment supports: $22,457.39
Total of all payments: $27,000.00
Interest paid over the term: $4,542.61

Step by step

1Values used
2Maximum loan
3Price ceiling
4Vehicle price you can afford= $27,457.39
5Maximum loan this payment supports= $22,457.39
6Total of all payments= $27,000.00
7Interest paid over the term= $4,542.61

Assumptions and limits

The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Affordability also depends on insurance, fuel, maintenance and your wider debt-to-income position. This shows loan capacity only, not whether the purchase is prudent.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Affordability also depends on insurance, fuel, maintenance and your wider debt-to-income position. This shows loan capacity only, not whether the purchase is prudent.

Frequently Asked Questions

Does this include tax, title and registration?

No. Those are usually financed on top of the vehicle price, so subtract roughly 8-10% from the price ceiling if you intend to roll them into the loan.

Should I stretch the term to afford more car?

It raises the ceiling but sharply increases total interest and the period you spend in negative equity. Sixty months is a common practical limit for a used car.