Car Affordability Calculator: The Real Math Behind '$X You Can Afford'

What the calculator assumes

Default assumption: 10% of gross monthly income goes to ALL car costs combined (loan, insurance, fuel, maintenance, parking). Outputs work backward from that ceiling to a maximum vehicle price.

What's NOT included

Sales tax on the purchase (typically 4–10% on top of sticker), title + registration ($150–$2,500 depending on state), insurance variance (some models cost 2× to insure), and your own debt-to-income headroom for the lender's underwriting.

How to stress-test the output

Lower the income by 15% (job loss buffer). Raise the insurance estimate by 30% (after-claim renewal). Add $50/month to maintenance (year-5+ scaling). If the budget still works, you've got real headroom.

Two-car households

For dual-income, two-car households: don't apply 10% to each car. Apply 12% to TOTAL household car costs. This prevents 'two budget-stretched cars' (one of the most common mid-30s mistakes).

Frequently asked questions

Should I use gross or net income?

Gross. Tax withholding varies; the 10% rule is built on gross income for portability across states and tax situations.

Does the calculator factor in my other debts?

Not directly — but lenders will. If your DTI is already 35%+, lenders will cap your auto loan well below what the calculator says you can afford.