Buying a car is a significant financial decision. While the sticker price or monthly loan payment is often the first thing people consider, true affordability goes much deeper. This calculator helps you assess whether your desired car payment, along with associated costs, fits comfortably within your budget.
The core principle behind determining car affordability is ensuring that your total monthly vehicle expenses do not consume an excessive portion of your income, leaving you with enough to cover your essential living costs and other financial goals.
How the Calculator Works:
This calculator uses a straightforward approach to assess your car affordability:
Monthly Net Income: This is the total amount of money you take home after taxes and other deductions. It's the actual money available for spending and saving.
Current Monthly Expenses: This includes all your essential living costs such as rent/mortgage, utilities, groceries, loan payments (excluding the potential car payment), and other regular bills.
Desired Monthly Car Payment: This is the amount you are willing or able to pay each month towards the car loan or lease.
Estimated Monthly Car Insurance: Car insurance is a mandatory cost that varies based on your vehicle, driving record, and coverage.
Estimated Monthly Fuel & Maintenance: This accounts for the ongoing costs of keeping your car running, including gasoline, oil changes, tire rotations, and unexpected repairs.
The calculator determines your Disposable Income by subtracting your current monthly expenses from your monthly net income.
It then calculates your Total Monthly Vehicle Costs by summing the desired car payment, estimated insurance, and estimated fuel/maintenance.
Finally, it compares your Total Monthly Vehicle Costs to your Disposable Income. If your vehicle costs are less than or equal to your disposable income, the calculator suggests you can likely afford the car. If they exceed your disposable income, it indicates that the car may be a financial strain.
Key Considerations for Car Affordability:
The 20/4/10 Rule: A popular guideline suggests putting at least 20% down, financing for no more than 4 years, and ensuring total monthly car expenses (payment, insurance, fuel) don't exceed 10% of your gross monthly income. While this calculator focuses on net income and specific costs, it's a good benchmark to keep in mind.
Emergency Fund: Ensure you have an emergency fund to cover unexpected repairs or job loss. Adding car costs to your budget should not deplete your savings.
Other Financial Goals: Don't let a car payment hinder your ability to save for retirement, education, or other important life goals.
Hidden Costs: Remember to factor in registration fees, taxes, potential parking costs, and any accessories you might need.
Depreciation: Cars are depreciating assets. Understand that the value of the car will decrease over time.
Use this calculator as a starting point for your car buying journey. Always perform a thorough budget review and consider your personal financial situation before making a commitment.
function calculateAffordability() {
var monthlyIncome = parseFloat(document.getElementById("monthlyIncome").value);
var currentMonthlyExpenses = parseFloat(document.getElementById("currentMonthlyExpenses").value);
var carPayment = parseFloat(document.getElementById("carPayment").value);
var carInsurance = parseFloat(document.getElementById("carInsurance").value);
var fuelAndMaintenance = parseFloat(document.getElementById("fuelAndMaintenance").value);
var resultMessageElement = document.getElementById("resultMessage");
// Input validation
if (isNaN(monthlyIncome) || monthlyIncome < 0 ||
isNaN(currentMonthlyExpenses) || currentMonthlyExpenses < 0 ||
isNaN(carPayment) || carPayment < 0 ||
isNaN(carInsurance) || carInsurance < 0 ||
isNaN(fuelAndMaintenance) || fuelAndMaintenance < 0) {
resultMessageElement.innerHTML = "Please enter valid positive numbers for all fields.";
resultMessageElement.className = "cannot-afford";
return;
}
var disposableIncome = monthlyIncome – currentMonthlyExpenses;
var totalCarCosts = carPayment + carInsurance + fuelAndMaintenance;
if (totalCarCosts <= disposableIncome) {
resultMessageElement.innerHTML = "Yes, you can likely afford this car!";
resultMessageElement.className = "afford";
} else {
var difference = totalCarCosts – disposableIncome;
resultMessageElement.innerHTML = "No, this car may be too expensive. Your total car costs exceed your disposable income by approximately $" + difference.toFixed(2) + ".";
resultMessageElement.className = "cannot-afford";
}
}