# Car Affordability Calculator

Use our free online Car Affordability Calculator in order to calculate how much you can spend on a car. Also, the calculator uses interest rates, trade-ins, sales taxes, down payments and loan terms to create a loan amortization schedule.

All you need to enter is:

- The monthly payment you can afford to pay for a car loan
- The amount you have available for a down payment
- If you are trading in a car, then enter the trade-in allowance
- Any cash rebates (if available)
- The loan term in number of months
- The annual interest rate of your loan, expressed as a percentage
- The applicable sales tax percentage

Once you have keyed these inputs, press 'Calculate' and the results will appear below.

## Reference

To calculate the loan amount we use the following formula:

*
P = (A / Rate) × { 1 − (1 + Rate)
^{
− N
}
}
*

*
Where:
*

*
P = The loan amount ,
*

*
A = The monthly loan payment ,
*

*
N = The number of monthly payments (for a 3 year loan N = 3 x 12 = 36) ,
*

*
Rate (monthly interest rate) = Decimal Rate / 12 , or Rate = (Annual Interest Rate / 100) / 12
*

You can also try this calculator to estimate how much your car will be worth after a number of years.