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FINANCE · VEHICLES

Car affordability calculator.

How much car your income supports under the 20/3/8 rule — 20% down, a 3-year loan, and a payment capped at 8% of gross income.

THE READ

Most people start from the sticker price. You just sized the price from a payment your income can actually carry.

About the Car Affordability Calculator

The Car Affordability Calculator uses the 20/3/8 rule to determine how much car you can truly afford: 20% minimum down payment, 3-year maximum loan term, and 8% maximum of gross income on total vehicle costs. Beyond the basic calculation, it factors in depreciation curves, insurance costs, maintenance, and the opportunity cost of tying up capital in a depreciating asset.

Frequently Asked Questions

What is the 20/3/8 rule for car buying?▼
The 20/3/8 rule is a guideline for responsible car purchasing: put at least 20% down, finance for no more than 3 years, and keep total vehicle expenses (payment, insurance, gas, maintenance) under 8% of your gross monthly income. Following this rule helps prevent being "car poor."
How fast do cars depreciate?▼
New cars lose roughly 20-30% of their value in the first year and about 15% per year after that. After 5 years, most cars are worth 35-40% of their original price. This is why buying a 2-3 year old used car is often the best financial decision — someone else absorbs the steepest depreciation.
Should I buy or lease a car?▼
Buying is almost always better financially if you keep the car for 5+ years. Leasing has lower monthly payments but you build no equity and face mileage restrictions and wear penalties. Leasing only makes sense if you need a new car every 2-3 years for business reasons or if the lease includes significant tax benefits.

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NOT ADVICE

Educational model · not personalized advice · projected outcomes are uncertain.

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