Car Affordability Calculator

About this calculator

This calculator works backward from a loan-payment formula rather than forward from a price. Given a monthly payment budget, an interest rate, and a loan term, it solves the standard amortization equation for the maximum loan principal that produces exactly that monthly payment, then adds any down payment to arrive at the maximum car price you can actually shop for.

Financial advisors recommend this approach specifically because car dealerships often steer negotiations toward “what monthly payment can you afford?” — a framing that makes it easy to stretch the loan term or interest rate to hit a number while the total price and total interest paid quietly balloon. Working out your maximum affordable price before walking into a dealership, based on your own budget and terms rather than the salesperson’s, keeps the negotiation anchored to the number that actually matters.

Enter your monthly payment budget, interest rate, and loan term, and this calculator gives you the maximum car price that fits.