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Estimate monthly car payments with price, down payment, and loan details.
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How Much Car Can You Afford?
The 20/4/10 rule is a practical guideline:
- Put at least 20% down
- Finance for no more than 4 years
- Keep total car costs (payment + insurance + gas + maintenance) under 10% of gross monthly income
On a $60,000 gross annual salary ($5,000/month), that means total car costs under $500/month. If insurance and gas cost $250/month, your max payment would be $250.
This rule is conservative -- many people spend more and manage fine. But stretching too far on a car (a depreciating asset) limits money available for savings and investments.
For a more detailed calculation including trade-in value, sales tax, and payment comparisons across different loan terms, see our auto loan calculator.
Free Car Payment Calculator
Know your monthly car payment before you start shopping. Enter the vehicle price, your down payment, interest rate, and loan term to instantly see your estimated monthly payment, total interest charges, and the total cost of the vehicle over the life of the loan. This helps you set a realistic budget and avoid overextending at the dealership.
The monthly payment is calculated using the standard amortization formula. A larger down payment directly reduces both your monthly payment and total interest paid. Most financial advisors recommend putting at least 20% down on a car to avoid negative equity.
Car Buying Tips
Get pre-approved for financing before visiting dealerships — it gives you negotiating leverage and a baseline rate to compare against dealer financing. Focus on the total cost of the vehicle (purchase price + total interest) rather than just the monthly payment. Dealers can make any monthly payment look affordable by extending the loan term, but you'll pay far more in total interest.