Car Affordability Check
When is a car too expensive?
A car is unaffordable when the monthly payment plus insurance, fuel and maintenance eats too large a slice of your income, or when a thin down payment and long term leave you owing more than the car is worth. This check is the forward companion to the reverse affordability calculator, which works back from a payment you name to the maximum price.
- Loan term is 5 years — the 20/4/10 rule caps it at 4 years.
The 20/4/10 rule: at least 20% down, a loan of no more than 4 years, and total car costs at or below 10% of gross monthly income. Rates used: new-car APR 6.39% / used 11.43% (Experian State of the Automotive Finance Market, Q1 2026). Planning aid only — not financial advice.
Frequently Asked Questions
How do I know if I can afford a specific car?
Enter the car price, your down payment, loan term and rate, and your household gross income. The tool adds the loan payment to your insurance, fuel and maintenance and shows it as a percentage of your gross monthly income, then flags the deal if it breaks the 20/4/10 rule (20% down, 4-year loan, total car costs at or below 10% of income).
What is the 20/4/10 rule for cars?
The 20/4/10 rule is a common planning checkpoint: put at least 20% down, finance for no more than 4 years, and keep total car costs (loan payment plus insurance, fuel and maintenance) at or below 10% of your gross monthly income. It keeps the payment manageable and limits how long you are upside-down on the loan.
Why does the loan rate matter so much?
In 2026 the average new-car loan APR is 6.39% and the average used-car loan APR is 11.43% (Experian Q1 2026) — roughly double. A higher rate raises the monthly payment and total interest, so a cheaper used car can end up costing more per month than a new one. The tool uses your rate, defaulting to the new-car average.
How is this different from the reverse affordability calculator?
The reverse calculator starts from a monthly payment you can afford and works back to the maximum price. This Car Affordability Check starts from a specific car price and tells you whether it fits your income and budget — the forward view you need when you have a car picked out.
Related tools
Updated August 2026 · Planning aid only; confirm all details with your lender and insurer.