Most car calculators ask for the price and tell you the payment. This one runs the other way: tell it the monthly payment you're comfortable with, and it shows the most car you can actually afford. It inverts the loan formula to find the largest loan that payment supports, then adds your down payment and trade-in and removes sales tax to give a realistic sticker price to shop for — in the US or Canada. Once you have a target price, open the True Cost of a Car calculator to see what owning it really costs.
Pick the monthly payment you're comfortable with, then the calculator finds the largest loan that payment can support at your APR and term — the loan formula run in reverse.
Max financeable = payment × (1 − (1 + r)^−n) ÷ r, where r is your monthly rate (APR ÷ 12) and n is the number of months.
Your down payment and trade-in are added on top of that loan, since they reduce what you need to finance.
Sales tax is then removed from the total (it applies to the price after the trade-in credit), leaving the sticker price you can afford — the number to take car shopping.
A common rule of thumb is to keep your car payment under about 10%–15% of your take-home pay, and the total price under roughly half your annual income. This calculator starts from whatever payment you choose and works back to the price that fits it — so you can test a comfortable number rather than guess.
Does it include sales tax, down payment, and trade-in?
Yes. Your down payment and trade-in add to what you can afford because they shrink the loan, and sales tax is removed from the total since you pay it on the car. The result is the pre-tax sticker price you can shop for, in USD or CAD.
Why is the affordable price higher than the loan amount?
Because the loan only covers the part you finance. Your down payment and trade-in cover the rest of the price, so the car you can afford is the loan plus those — minus the sales tax that gets added at the dealership.