acalculator

What car price can I afford?

Enter the monthly payment you are comfortable with, your cash down, and the loan terms to see the highest car price that fits.

Your numbers

For example 36, 48, 60 or 72.
Enter 0 if you pay no sales tax.
Fees
Car price you can afford
$28,251.00

A payment of $500.00 a month for 60 months at 7%, with $3,000.00 down, buys a car of up to $28,251.00.

Loan amount
$25,251.00
Sales tax
$0.00
Total interest
$4,749.00
Total cost of the car
$33,000.00

Car price you can afford: $28,251.00. A payment of $500.00 a month for 60 months at 7%, with $3,000.00 down, buys a car of up to $28,251.00.

The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use

How to calculate

Computes the most expensive car a monthly payment can buy, from the payment, loan rate and term, cash down, trade-in, sales tax and fees.

Example with the default inputs (Monthly payment you can afford $500.00, Cash down $3,000.00, Trade-in value $0.00, Interest rate (APR) 7%, Loan term (months) 60, Sales tax rate 0%, Dealer and registration fees $0.00): A payment of $500.00 a month for 60 months at 7%, with $3,000.00 down, buys a car of up to $28,251.00.

Method: loan = payment × (1 − (1 + i)^−n) ÷ i with i = APR ÷ 12; price = trade-in + (loan + cash down − fees) ÷ (1 + sales tax rate).

  • A fixed-rate loan with equal monthly payments; sales tax and fees are added to the loan.
  • Sales tax is charged on the price minus the trade-in, as the auto loan calculator assumes. States differ, so check your state’s rule.
  • Insurance, fuel, maintenance and registration renewals are not included; budget for them on top of the payment.
  • There is no answer when the fees are as large as, or larger than, the loan plus the cash down.

Machine-readable copies: Markdown, JSON.

Worked examples

Each example is checked against the calculator on every build.

  1. Monthly payment you can afford $450.00, Cash down $4,000.00, Trade-in value $0.00, Interest rate (APR) 6.5%, Loan term (months) 60, Sales tax rate 7%, Dealer and registration fees $600.00 gives Car price you can afford $24,671.87, Loan amount $22,998.91, Sales tax $1,727.03, Total interest $4,001.09, Total cost of the car $31,000.00.Source: hand calculation in content.mdx: loan = 450 × (1 − 1.0054167⁻⁶⁰) ÷ 0.0054167 = 22,998.91; price = (22,998.91 + 4,000 − 600) ÷ 1.07 = 24,671.87
  2. Monthly payment you can afford $400.00, Cash down $2,000.00, Trade-in value $0.00, Interest rate (APR) 0%, Loan term (months) 48, Sales tax rate 0%, Dealer and registration fees $0.00 gives Car price you can afford $21,200.00, Loan amount $19,200.00, Total interest $0.00.Source: hand calculation in content.mdx: at 0%, loan = 400 × 48 = 19,200; price = 19,200 + 2,000 = 21,200
  3. Monthly payment you can afford $400.00, Cash down $2,000.00, Trade-in value $0.00, Interest rate (APR) 0%, Loan term (months) 48, Sales tax rate 6%, Dealer and registration fees $250.00 gives Loan amount $19,200.00, Car price you can afford $19,764.15, Sales tax $1,185.85.Source: hand calculation in content.mdx: loan = 400 × 48 = 19,200; price = (19,200 + 2,000 − 250) ÷ 1.06 = 19,764.15
  4. Monthly payment you can afford $552.70, Cash down $6,000.00, Trade-in value $0.00, Interest rate (APR) 5%, Loan term (months) 48, Sales tax rate 0%, Dealer and registration fees $0.00 gives Car price you can afford $30,000.00, Loan amount $24,000.00.Source: the reverse of the auto loan example ($30,000 price, $6,000 down, 5% for 48 months is $552.70 a month; amortized payment formula)
  5. Monthly payment you can afford $600.00, Cash down $2,000.00, Trade-in value $5,000.00, Interest rate (APR) 7%, Loan term (months) 72, Sales tax rate 6%, Dealer and registration fees $800.00 gives Car price you can afford $39,332.70, Sales tax $2,059.96, Total cost of the car $50,200.00.Source: hand calculation in content.mdx: loan 35,192.67; price = 5,000 + (35,192.67 + 2,000 − 800) ÷ 1.06 = 39,332.70; tax on 34,332.70

How the car price is worked out

  1. Loan the payment repays. With a monthly rate i = APR ÷ 12 (as a decimal) and n payments: loan = payment × (1 − (1 + i)^−n) ÷ i. At 0%, loan = payment × n.
  2. Price. The loan pays for the price plus sales tax and fees, less your cash down and trade-in: loan = price + t × (price − trade-in) + fees − cash down − trade-in, where t is the sales tax rate as a decimal. Solving for the price: price = trade-in + (loan + cash down − fees) ÷ (1 + t).

The calculator also shows:

  • sales tax = t × (price − trade-in)
  • total interest = payment × n − loan
  • total cost of the car = cash down + trade-in + payment × n, which is the same as price + tax + fees + interest

Assumptions

  • A fixed-rate loan with equal monthly payments. Sales tax and fees are added to the loan.
  • Sales tax is on the price minus the trade-in. States differ.
  • Insurance, fuel, maintenance and later registration renewals are not included.
  • There is no answer when the fees are as large as, or larger than, the loan plus the cash down.

Worked examples by hand

$450 a month for 60 months at 6.5%, $4,000 down, 7% tax, $600 fees. i = 0.065 ÷ 12 = 0.0054167. Loan = 450 × (1 − 1.0054167^−60) ÷ 0.0054167 = $22,998.91. Price = (22,998.91 + 4,000 − 600) ÷ 1.07 = $24,671.87. Sales tax = 0.07 × 24,671.87 = $1,727.03. Interest = 450 × 60 − 22,998.91 = $4,001.09. Total cost = 4,000 + 27,000 = $31,000.

$400 a month for 48 months at 0%, $2,000 down. Loan = 400 × 48 = $19,200. Price = 19,200 + 2,000 = $21,200.

The same at 0% with 6% tax and $250 of fees. Loan = $19,200. Price = (19,200 + 2,000 − 250) ÷ 1.06 = 20,950 ÷ 1.06 = $19,764.15. Sales tax = 0.06 × 19,764.15 = $1,185.85.

The auto loan in reverse. A $30,000 car with $6,000 down at 5% for 48 months costs $552.70 a month. Starting from that payment: loan = 552.70 × (1 − 1.0041667^−48) ÷ 0.0041667 = $24,000, and price = 24,000 + 6,000 = $30,000.

$600 a month for 72 months at 7%, $2,000 down, $5,000 trade-in, 6% tax, $800 fees. Loan = $35,192.67. Price = 5,000 + (35,192.67 + 2,000 − 800) ÷ 1.06 = $39,332.70. Sales tax = 0.06 × (39,332.70 − 5,000) = $2,059.96. Total cost = 2,000 + 5,000 + 600 × 72 = $50,200.

Other questions people ask

How much car can I afford?

Start from the monthly payment you can fit in your budget. The loan that payment repays depends on the rate and term: $450 a month for 60 months at 6.5% repays $22,998.91. Add your cash down, take off fees, and divide by (1 + sales tax rate) to get the price: with $4,000 down, $600 of fees and 7% tax, that is $24,671.87.

Does a longer loan let me afford more car?

It raises the price a payment can cover, but you pay more interest in total, and a long loan can last longer than you want the car. Compare the total cost, not only the monthly payment.

What costs should I include?

The CFPB suggests adding up the price, taxes, title and registration, and dealer fees, then taking off your down payment and trade-in. Also budget for insurance, fuel and maintenance, which this calculator does not include.

How does a trade-in change what I can afford?

A trade-in adds its value to what you can spend, and in this calculator it also lowers the taxed amount, because sales tax is charged on the price minus the trade-in. Check your state's rule.

How much of my income should go to a car payment?

There is no official limit. Lenders look at your debt-to-income ratio: all monthly debt payments, including the new car payment, divided by your gross monthly income. Use the debt-to-income ratio calculator to see how a payment changes it.

What if I pay the tax and fees in cash?

Then more of each payment goes to the car. This calculator assumes tax and fees are added to the loan; if you pay them up front, add them to your cash down and set them to 0 here.