Find out how much car you can afford based on the 15% rule. Enter your income, down payment, and loan details to see the maximum price and total cost of ownership.
Monthly Ownership Costs
Max Car Price (15% rule)
$13,177
Est. Monthly Payment
$160
Total Monthly Car Cost
$600
% of Take-Home Pay
15.0%
Total Interest Paid
$1,423
Total Loan Cost
$9,600
Based on keeping total car costs under 15% of monthly take-home pay.
Car price as a percentage of annual gross income. Experts recommend keeping it under 35%.
Loan Payments
$9,600
$160/mo
Insurance
$11,400
$190/mo
Gas / Fuel
$9,000
$150/mo
Maintenance
$6,000
$100/mo
Grand Total Over 5 Years
$36,000
That is $22,823 more than the car price
5-Year Total
$39,817
$600 of $4,000 monthly income
Shorter terms save on interest but have higher monthly payments. Longer terms reduce monthly cost but increase total interest paid.
You selected Used. Used cars save on purchase price and depreciation, but may come with higher maintenance and financing costs.
The sticker price is just the beginning. Insurance, fuel, maintenance, registration, and depreciation all add to the true cost of owning a car. A good rule of thumb is to keep your total transportation costs — payment plus all running costs — below 15% of your gross income. The popular 20/4/10 rule offers more specific guardrails: 20% down, 4-year max term, and 10% of gross income on all vehicle costs.
| Vehicle Type | Average Price | Source |
|---|---|---|
| New car (overall) | $48,528 | Kelley Blue Book |
| Used car (overall) | $28,297 | CARFAX |
| New sedan | $35,000–$40,000 | KBB |
| New SUV | $42,000–$55,000 | KBB |
| New truck | $52,000–$60,000 | KBB |
Your credit score has a major impact on the interest rate you qualify for. Here are average rates from Experian's State of the Automotive Finance Market:
| Credit Score | New Car APR | Used Car APR |
|---|---|---|
| 781–850 (Super Prime) | 5.18% | 7.24% |
| 661–780 (Prime) | 6.88% | 9.49% |
| 601–660 (Near Prime) | 9.69% | 13.28% |
| 501–600 (Subprime) | 12.28% | 18.39% |
| 300–500 (Deep Subprime) | 14.78% | 21.55% |
According to AAA's annual Your Driving Costs study, here is the average yearly cost breakdown for a new vehicle driven 15,000 miles per year:
| Cost Category | Annual Cost |
|---|---|
| Fuel | $2,060 |
| Insurance | $1,810 |
| Maintenance & tires | $1,370 |
| License, registration, taxes | $810 |
| Depreciation | $4,200 |
| Finance charges | $810 |
| Total | ~$12,297/yr ($1,025/mo) |
Financial advisors widely recommend the 20/4/10 rule: put at least 20% down, finance for no more than 4 years, and keep total vehicle costs (payment, insurance, fuel, maintenance) under 10% of gross income. A simpler guideline is to keep total car costs below 15% of your monthly take-home pay.
The 20/4/10 rule says to make a 20% down payment, choose a loan term of 4 years or less, and spend no more than 10% of your gross monthly income on total transportation costs. Following this rule helps you avoid being underwater on your loan and keeps car expenses manageable relative to your income.
Aim for at least 20% down on a new car and 10% on a used car. A larger down payment reduces your monthly payment, lowers total interest paid, and helps you avoid negative equity (owing more than the car is worth). The average down payment on new vehicles in the U.S. is around $6,000.
Longer terms (72-84 months) lower monthly payments but increase total interest paid by thousands of dollars. You also risk being underwater on the loan much longer because the car depreciates faster than you pay it off. Stick to 48-60 months to balance payment size with total cost.
According to AAA, the average cost to own and operate a new vehicle in 2024 is about $12,297 per year, or roughly $1,025/month. This includes fuel, insurance, maintenance, tires, license/registration, depreciation, and financing. SUVs and trucks cost significantly more than sedans.
New cars lose 20-30% of their value in the first two years. A 2-3 year old certified pre-owned (CPO) vehicle often offers the best balance of reliability, warranty coverage, and value. Average used car prices in 2024 are around $28,000 compared to $48,000+ for new vehicles.
A credit score of 720+ typically qualifies you for the best auto loan rates (around 5-6% for new cars). Scores between 660-719 get average rates around 7-9%, while subprime borrowers (below 620) may face rates of 12-20% or higher. Even a 1-2% rate difference can save thousands over the loan term.
The national average for full-coverage auto insurance is about $2,300 per year ($192/month), but costs vary widely by state, age, driving record, and vehicle type. Young drivers under 25 pay significantly more. Getting quotes before purchasing a vehicle helps you budget accurately.
Loan Payoff Calculator
Find out how long it will take to pay off your loan and how much you can save by making extra payments. See your debt-free date and total interest savings.
Fuel Cost Calculator
Calculate the fuel cost for any trip. Enter your distance, vehicle's MPG, and current gas price to see total cost, gallons needed, and cost per mile.