Free calculator · Personal Finance
Car Affordability
Calculates the car price a monthly payment budget can generally support by discounting the payments at the loan rate and adding the cash down payment and any trade-in value. Inputs are the monthly budget, the loan rate, the term in months, the down payment, and the trade-in value.
By Devon Coombs, CPA, MBA · Teaching Professor of Finance, Santa Clara University · Reviewed August 2026
Interactive Tool
Car Affordability
Affordable car price
$25,726
at $450/mo for 60 months
Loan the payments support
$22,726
PV at the loan rate
Cash up front
$3,000
down + trade-in
Financing cost
$4,274
interest over 60 months
PV = $450 × (1 − (1 + i)^−60) ÷ i = $22,726, where i = 7.0%/12; price = PV + $3,000
The price shown excludes tax, title, and fees, which typically add several percent, and a longer term raises the affordable price only by adding interest months.
Learn the concept
This calculator comes from the free Corporate Finance: The 10 Laws of Finance course, where the concept is taught with readings, worked examples, and practice questions.
Precomputed reference tables
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Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.