How much car can you actually afford?

As a starting point, this calculator uses the 20/4/10 rule: at least 20% down, a loan term of 4 years (48 months) or shorter, and total vehicle cost (loan payment plus insurance) at or under 10% of your gross monthly income. That's the Comfortable tier. Stretch and Risky widen that ceiling, the same way this site's other calculators widen past a lender's ideal ratio — but widening the ratio doesn't widen your actual bank account, which is why the leftover-income check exists.

A commonly-cited personal-finance rule of thumb for car buying: put at least 20% down, finance for no more than 4 years, and keep total monthly vehicle costs (payment plus insurance) at or under 10% of your gross monthly income. It's not a lending regulation — it's a conservative guideline, and this calculator uses it as the anchor for the Comfortable tier.

Yes. Sales tax is calculated using your state's typical combined rate on the price minus any trade-in value, then financed into the loan along with the rest of the purchase price minus your down payment and trade-in. Monthly insurance is a direct input, since premiums vary too much by driver, vehicle, and location to estimate from a table.

A lender or dealer's finance desk is checking whether you qualify for a loan, not whether the payment leaves room in your budget for everything else. This calculator runs both: the 20/4/10-style rule most personal-finance guidance recommends, and a separate leftover-income test that subtracts your other debts and real monthly expenses to see if the payment is actually sustainable. The gap between the two is the number worth paying attention to.