CalculynQuick answer
On $4,500 take-home pay with 10% for the car, $3,000 down and a 60-month loan at 7%, you can afford about $25,700.
How it works
A common guideline is to keep your car payment under 10% of take-home pay (and all car costs under 15–20%). This turns that payment into a price using your loan terms.
Formula
Loan = payment × (1 − (1 + r)^−n) ÷ r · Price = loan + down payment
Assumptions & limitations
- Results are rounded for display.
Frequently asked questions
Should I include insurance and fuel?
Yes — budget for those separately. Many guides suggest keeping total car costs under 15–20% of take-home pay.
Is a longer loan better?
It lowers the payment but costs more interest and risks owing more than the car is worth.