Car Affordability Calculator

How the 20/4/10 rule works

20% down so you start with equity and never owe more than the car is worth. 4 years max so you're not paying interest on a depreciating asset into year seven. 10% of gross income on the payment so the car doesn't eat your savings rate. This calculator works backward from your income: it caps the payment, converts that to a loan amount at your rate over 48 months, adds your down payment, and strips out provincial sales tax to get the sticker price you can actually shop for.

Why the dealer math feels more generous

Dealers quote payments, not prices — and an 84-month term makes almost any car "fit" your monthly number. The comparison above shows what that generosity costs. If the car you want only works at 72–84 months, the honest answer is that it doesn't work. Run the exact offer through the auto loan calculator before signing.

Don't forget the tax line

In Canada, GST/HST/PST applies to the vehicle price and is almost always financed. That ranges from 5% in Alberta to 15% in New Brunswick, Newfoundland and Labrador and PEI: on a $30,000 car, $1,500 of tax versus $4,500, and none of it shows up in the advertised price. BC also charges a higher PST rate on vehicles priced over $55,000. The selector above uses the standard rate for each province; more on the full cost stack in our car affordability guide.

The payment is not the cost of the car

Insurance, fuel, maintenance, and winter tires typically add $350–$600/month. If total car costs push past 15–20% of gross income, something else — usually savings — is being crowded out. Check what your income actually takes home with the income tax calculator before committing.