How much car can I afford?

Car Affordability Calculator

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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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How to use our auto affordability calculator

Other car calculators start with a car price and tell you what kind of monthly payment you could expect. This calculator starts with the payment that fits best into your budget and shows you how much you should spend on a car. Adjust the down payment, interest rate, term and more to see how it changes your total loan amount.

Ready to get custom loan offers today?  See Personalized Auto Rates and Offers

  Desired monthly payment

The average new car payment is $700 ($525 for used vehicles), but your budget and preferences might not allow for that figure. For lower monthly payments, consider buying used or leasing a car.

  Down payment

A down payment can reduce your total borrowing cost, even if it’s small. But the larger your down payment, the more you reduce your monthly car note and interest fees. Additionally, if you have a trade-in with equity, the equity can count toward your down payment.

  Trade-in value

The dealer will appraise the value of your old vehicle when you make a trade in. Dealerships often offer bottom-dollar for trade-ins, so be sure to research the market value of your car with free car valuation tools like Kelley Blue Book (KBB) before accepting a trade-in offer. To get the best price for your old car, consider selling it yourself.

 Learn more about how to trade in your car.

  Amount owed on trade

A trade-in may require extra steps if you still owe money on your old car. One option is letting the dealer roll the difference between your trade-in value and your loan payoff amount into your new loan.

  Credit score

Your credit score is a three-digit number that reflects your history with managing debt. The higher your score is, the more affordable your loan terms will be. A few things to keep in mind:

  Interest rate

This is what you pay to the lender for borrowing money, not including any fees. Interest charges are typically calculated as a set percentage of the remaining amount you owe each month.

 Check current auto loan rates today.

 Loan term

This is how long the loan repayment will take, from the time you sign for your car until your final payment, assuming you make the minimum payment due each month.

Compare Auto Financing Offers

How to determine what car you can afford

Car prices continue to rise steeply, with the average loan for a new car hitting $41,665 in 2022. While the average loan amount on used cars was much cheaper ($28,506), it’s not necessarily affordable for all consumers. Here are a few ways to calculate what fits in your budget:

1. Use the 20/4/10 rule as a guideline

One financial guideline that can help you determine how much car you can afford is the 20/4/10 rule. Like any financial rule, it may not fit your exact situation, but it can still help narrow down your decision.

According to the 20/4/10 rule, a car loan is affordable if you can say “yes” to all three of these questions:

  • 20: Can I afford a down payment of at least 20% of the purchase price?
  • 4: Can I afford to pay back the loan in four years or less?
  • 10: Can I keep my total car expenses (including everything from loan payments to gas and insurance) at 10% or less of my monthly take-home pay?

2. Calculate your total automotive costs

The upfront costs of financing a car are important to consider, but owning a car involves recurring monthly expenses and one-off costs, too. For the purchase to be affordable, you’ll need to fit all of these costs into your budget:

  • Down payment
  • Sales tax and registration fees
  • Monthly loan payments
  • Car insurance premiums
  • Maintenance and repairs
  • Gas
  • Parking and/or tolls


3. Shop around for a car loan

Much like buying groceries, you’ll pay a different price for an auto loan depending on where you shop. Credit unions and banks often have the most affordable terms, but you may be able to get special, low-interest financing on a new car through the manufacturer. You may also find a good deal through an online marketplace like LendingTree, which can help search for auto loans from multiple lenders.

To find the best price, you’ll need to compare preapproval offers from multiple lenders. Getting preapproved can help you plan your budget and may give you additional negotiating power during the car-buying process.

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4. Consider all of your options

Having a limited budget doesn’t mean you have to buy a jalopy. Here are a few expenses associated with new cars, used vehicles and leases to consider when you’re asking yourself “How much car can I afford?”

New car: New cars are pricier, but they’re also covered by manufacturer’s warranties and are generally more reliable, so the bigger up-front cost can lead to savings on maintenance and repairs.

Used car: Cars lose a significant amount of value in the first year of ownership, so buying a used car can save you a ton of money on the sticker price. Plus, some certified pre-owned vehicles come with warranties to cover specific repairs.

Lease: If your only goal is to reduce your monthly auto payment, a lease may be the way to go. While you won’t become the owner of the car after the lease runs out, you can save an average of $133 a month by leasing a brand new car instead of buying.

Learn more about how to buy a car.