Car Affordability Calculator
Updated on 22 Oct 2026 · Checked by Aotob
With $500 a month and $5,000 down, you can afford about $25,880.
That is a $20,880 loan at 7% over 48 months.
Car you can afford
$25,880
The 20/4/10 rule: put 20% down, borrow for no more than 4 years, and keep payment plus insurance under 10% of gross pay. Longer loans buy a pricier car but cost more interest.
Show the working
Payment = 5,000 × 10% = 500
Loan = payment × (1 − (1 + r)−48) ÷ r = 20,880
Price = 20,880 + 5,000 = 25,880
Price by loan length
| Months | Car price | Interest paid |
|---|---|---|
| 24 | 16,168 | 832 |
| 36 | 21,193 | 1,807 |
| 48 | 25,880 | 3,120 |
| 60 | 30,251 | 4,749 |
| 72 | 34,327 | 6,673 |
| 84 | 38,129 | 8,871 |
Questions people ask
How much should I spend on a car?
A common guide is 20/4/10: 20% down, a loan of 4 years or less, and car payment plus insurance under 10% of gross pay. 15% is a looser limit.
Is a longer loan a good idea?
It lowers the payment but costs more interest, and you can owe more than the car is worth for years.
What running costs should I count?
Insurance, fuel or charging, servicing, tyres, registration and parking.
Updated 22 Oct 2026Source: Standard maths; typical prices are averages, checked October 2026Checked by AotobA guide, not a lending decision.Report an issue