Determine your realistic vehicle purchase power based on income and expenses.
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Maximum Recommended Vehicle Sticker Price$0.00
Total Monthly Transportation Budget$0.00
Available for Monthly Car Payment$0.00
Estimated Total Out-the-Door Cost$0.00
Estimated Taxes & Fees Total$0.00
How to Calculate Your Car Buying Budget
Buying a car is one of the most significant financial decisions most people make. Instead of looking at a monthly payment in isolation, a smart car buyer looks at the "Total Cost of Ownership" and "Buying Power." Our calculator uses the 10-15% rule to ensure your new vehicle doesn't lead to "car-poor" status.
Understanding the 15% Rule
Financial experts typically suggest that your total transportation costs—including car payments, insurance, fuel, and maintenance—should not exceed 10% to 15% of your gross monthly income. If you are using net (take-home) pay, staying closer to 15% is a safe ceiling.
Factors That Impact Your Buying Power
Net Income: This is the foundation of your budget. Always calculate based on what actually hits your bank account.
Cash Savings & Trade-In: These are your biggest leverage points. The more you put down upfront, the higher the sticker price you can afford without increasing your monthly burden.
Recurring Costs: Many buyers forget that insurance for a new SUV might be double what they paid for an old sedan. Fuel and maintenance must be subtracted from your total allocation before determining what's left for a car payment.
Taxes and Fees: The sticker price isn't the final price. Sales tax, documentation fees, and registration can add 8% to 12% to the total cost.
Example Calculation
If you earn $5,000 net per month and allocate 15%, your total transport budget is $750. If insurance is $150 and fuel is $200, you have $400 left for a payment. Over a standard 60-month ownership period, that $400 payment capacity represents approximately $20,000 in financing power. If you add a $5,000 trade-in, your buying power sits around $25,000 before taxes.
function calculateCarBudget() {
var income = parseFloat(document.getElementById('cb-monthly-income').value) || 0;
var savings = parseFloat(document.getElementById('cb-cash-savings').value) || 0;
var tradeValue = parseFloat(document.getElementById('cb-trade-value').value) || 0;
var insurance = parseFloat(document.getElementById('cb-insurance-cost').value) || 0;
var fuel = parseFloat(document.getElementById('cb-fuel-cost').value) || 0;
var taxRate = parseFloat(document.getElementById('cb-tax-rate').value) || 0;
var fees = parseFloat(document.getElementById('cb-dealer-fees').value) || 0;
var budgetPercent = parseFloat(document.getElementById('cb-budget-percent').value) || 15;
if (income <= 0) {
alert("Please enter a valid monthly income.");
return;
}
// Calculate total monthly allocation
var totalMonthlyBudget = income * (budgetPercent / 100);
// Calculate what is left for the car payment after recurring expenses
var monthlyCarPaymentCapacity = totalMonthlyBudget – insurance – fuel;
if (monthlyCarPaymentCapacity <= 0) {
document.getElementById('cb-max-sticker').innerHTML = "Budget Too Low";
document.getElementById('cb-results-area').style.display = 'block';
return;
}
// Estimate purchasing power based on 60 months of ownership
// (Simulating a conservative payment capacity without explicit loan logic)
var financingPower = monthlyCarPaymentCapacity * 60;
// Total gross buying power including cash and trade
var totalBuyingPower = financingPower + savings + tradeValue;
// We must account for taxes and fees.
// Formula: Sticker Price + (Sticker Price * Tax) + Fees = Total Buying Power
// Sticker Price * (1 + Tax) = Total Buying Power – Fees
// Sticker Price = (Total Buying Power – Fees) / (1 + TaxRate/100)
var maxStickerPrice = (totalBuyingPower – fees) / (1 + (taxRate / 100));
if (maxStickerPrice < 0) maxStickerPrice = 0;
var totalTaxFees = (maxStickerPrice * (taxRate / 100)) + fees;
var totalOTD = maxStickerPrice + totalTaxFees;
// Display Results
document.getElementById('cb-max-sticker').innerHTML = "$" + maxStickerPrice.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('cb-total-monthly').innerHTML = "$" + totalMonthlyBudget.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('cb-monthly-pmt').innerHTML = "$" + monthlyCarPaymentCapacity.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('cb-total-otd').innerHTML = "$" + totalOTD.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('cb-tax-fees').innerHTML = "$" + totalTaxFees.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('cb-results-area').style.display = 'block';
// Smooth scroll to results
document.getElementById('cb-results-area').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}