Plug in your take-home pay and see the maximum vehicle price that keeps you inside a healthy auto budget — payment, insurance, gas, and maintenance combined.
Personal-finance guidance has long suggested keeping total monthly transportation costs under 15% of take-home pay. That includes the loan payment, insurance, gas, and routine maintenance. Above 15%, the car starts crowding out other priorities (savings, retirement, debt payoff). Above 20%, you're vehicle-rich and cash-poor.
For a borrower bringing home $5,000/month, that's $750 total — leaving roughly $340–$450 for the loan payment after insurance and operating costs.
It works backwards from your budget: subtract insurance and operating costs from your transportation budget, find the loan payment that fits, then back out the maximum financed amount at your APR and term.
The result is the max vehicle price (loan + down payment) that fits your stated comfort zone. Buy below this number and you're well-positioned; buy above and the math gets tight.
Sales tax (state-specific, typically 4–9% added to the vehicle price), title and registration fees, dealer doc fees. Add 8–10% to the vehicle price for these in most states, then re-check your numbers.
For new-car buyers in expensive insurance states, sometimes barely. For used-car buyers in lower-cost-of-living areas, easily. If 15% feels impossibly tight, the answer is usually a less expensive car — not a longer loan term.
Yes. They're real, recurring, vehicle-driven costs. A "cheap" car payment with $300/month insurance isn't actually cheap. The 15% rule is a total-cost rule.
Bump the gas estimate proportionally. A 60-mile round-trip commute can run $300+/month in gas alone. The calculator should reflect actual costs, not generic averages.