How Much Car Can I Afford?
Enter your income, credit score, and loan term to see your budget instantly
Your credit score determines your interest rate, which affects how much car you can afford
You can comfortably afford
or less for your next car
$542
Payment
$271
Insurance + Gas
$813
Total/month
That's 15% of your monthly income · 60 months @ 7% APR
Max car value
$30k
Loan terms
60 months @ 7%
With $3k down
Finance $27k
How we calculate this
We use the 10% rule: your monthly car payment shouldn't exceed 10% of your gross monthly income. At $65,000/year, that's a max payment of $542/month. With your credit score (700-749, 7% APR) and a 60-month loan, that payment supports a max car value of $30,372 including your $3,000 down payment. Better credit means a lower rate, which means more car for the same monthly payment.
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How to Figure Out What Car You Can Afford
The biggest mistake car buyers make is shopping based on the monthly payment a dealer quotes them. Dealers stretch loan terms to 72 or 84 months to make any car "affordable" — but you end up paying thousands more in interest and risk being underwater on the loan for years.
Instead, start with your income and work backwards. The 10% rule says your monthly car payment should not exceed 10% of your gross monthly income. This keeps your total car costs (payment + insurance + gas) under 15-20% of income, leaving room for savings, housing, and everything else.
Your credit score matters more than most people realize. The difference between excellent credit (5.5% APR) and poor credit (15% APR) on a 60-month loan can mean $5,000-$8,000 less car you can afford for the same monthly payment. If your credit needs work, improving it before buying is one of the best financial moves you can make.
Once you know your budget, the next step is seeing what that money actually buys. On CarWhere, you can browse verified deals from real buyers to see actual transaction prices — not MSRP, not estimates, but what people actually paid. This helps you find vehicles in your price range and know what discount to expect before you walk into the dealership.
Frequently Asked Questions
How much car can I afford on my salary?
Use the 10% rule: your monthly car payment should not exceed 10% of your gross monthly income. For a $60,000 salary ($5,000/month), that means a max payment of about $500/month. With good credit (7% APR) and a 60-month loan, that supports roughly a $28,000 car with $3,000 down. For a $100,000 salary, the same math works out to about $47,000. Your credit score and loan term directly affect this number — better credit means you can afford more car for the same payment.
How does credit score affect how much car I can afford?
Your credit score determines your auto loan interest rate, which directly impacts how much car you can afford. With excellent credit (750+), you might get 5-6% APR. With fair credit (650-699), expect 9-12%. With poor credit (below 650), rates can exceed 15%. On a 60-month loan with the same monthly payment, excellent credit could mean affording $5,000-$8,000 more car than poor credit. The higher the rate, the more of your payment goes to interest instead of principal.
What percentage of income should go to a car payment?
The 10% rule says your monthly car payment should not exceed 10% of your gross monthly income. When you add insurance ($100-$200/month) and gas ($150-$250/month), your total monthly car costs should stay under 15-20% of gross income. Staying within these limits leaves room for savings, emergencies, housing, and other financial goals. If you need to stretch beyond 15% for a car, you may want to consider a less expensive vehicle.
Is a 60-month or 72-month auto loan better?
A 60-month (5-year) loan is the sweet spot for most buyers — it keeps payments manageable while limiting total interest paid. A 72-month loan lowers your monthly payment but you pay significantly more in interest over the life of the loan (often $2,000-$4,000 more), and you risk being underwater (owing more than the car is worth) for longer. If you need 72+ months to afford the payment, the car may be too expensive for your budget.
Should I buy new or used to stay in budget?
Used cars (2-4 years old) often offer the best value since they have already taken the steepest depreciation hit (new cars lose 20-30% in year one) while still having modern safety features and remaining warranty coverage. A certified pre-owned vehicle can save you 20-30% compared to buying new. However, new cars sometimes have better financing rates (0-2% APR) which can offset some of the price difference. Check what verified buyers paid on CarWhere for both new and recent-model-year used vehicles to compare.
How much should my down payment be on a car?
Aim for 20% down on a new car and 10% on a used car. A larger down payment means a smaller loan, lower monthly payments, less interest paid over the life of the loan, and reduced risk of being underwater. Even $1,000-$3,000 down makes a meaningful difference on a $25,000-$35,000 vehicle. If you can't put anything down, that's a signal to consider a less expensive vehicle — starting a car loan with zero equity is risky.
What hidden costs should I include in my car budget?
Beyond the purchase price and monthly payment, budget for: auto insurance ($100-$250/month depending on coverage and driving record), gas or charging ($100-$300/month), registration and title fees ($100-$500/year), maintenance and repairs ($50-$100/month average), and potential parking costs. For new cars, also factor in dealer fees ($500-$2,000) and sales tax (varies by state, typically 5-10% of purchase price). These costs add up — a $400/month car payment often becomes $700-$900/month in total car costs.
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