About
Conservative rule for car buyers: 20% down (avoid being underwater), 4-year loan (avoid long debt), 10% of gross monthly income for total transport (loan + insurance + gas + maintenance). Violating any = car is too expensive. Buy used + cheaper.
The 20/4/10 rule was popularized by Dave Ramsey and the personal-finance education community as a buffer against the dominant car-debt failure mode: negative equity. Experian's State of the Automotive Finance Market reports that the average new-car loan in 2025 stretched to 68.5 months (5.7 years) with an average payment of $742 and average APR of 6.84% for prime buyers and 12-17% for subprime. About 24% of trade-ins in 2025 were "upside down" by an average of $6,800. Putting 20% down on a $35,000 car ($7,000) and capping the term at 48 months keeps your principal balance below the predicted depreciation curve, which AAA pegs at 22% in year one and roughly 15% per year through year five. The 10% cap on total monthly transport (payment + insurance + fuel + maintenance + registration) is the binding constraint for most households since AAA's 2025 driving-cost survey put average full ownership cost at $12,297 per year, or $1,025 per month.
Formula
Frequently asked questions
How accurate is the Car Affordability?
It applies the standard formula. Accuracy is limited only by your input precision. For decisions with material consequences (taxes, medical, legal, structural), use the result as a starting point and verify with a qualified professional in the relevant field.
Is the Car Affordability free to use?
Yes. 100% free, no signup, no payment, no API key. The site is funded by display ads around the tool but not inside the calculation flow.
Are my inputs saved anywhere?
No. All inputs stay in your browser tab. Closing the tab discards them. The site uses Google Analytics for traffic measurement (anonymized) but the analytics never see what you type into the form.
Can I use the Car Affordability on my phone?
Yes. The tool is responsive and tested on iOS Safari, Android Chrome, and major desktop browsers. Touch targets meet Apple's 44pt and Google's 48dp minimum.
Does the Car Affordability work offline?
Yes. Once the page has loaded, it works without internet. The calculation runs in JavaScript on your device.
How do I report a bug or suggest improvement to the Car Affordability?
Email hi@3tej.com with the URL of this page and a description of what you saw vs expected. We typically respond within 72 hours.
Can I share results from the Car Affordability?
Take a screenshot or copy the output. The page doesn't generate shareable URLs for specific calculations - inputs stay in your browser only.
Why are the results different from another car affordability tool?
Most likely: different formula assumptions, different default values, different rounding rules, or different applicable rates. Check the methodology if both tools document it. Both can be valid for different scenarios.
Is the Car Affordability accurate?
The Car Affordability applies the standard formula for car affordability. Accuracy is limited only by your input precision. For decisions with material consequences, use the result as a starting point and verify with a qualified professional or the relevant official source.
Is the Car Affordability free?
Yes. 100% free, no signup, no payment, no API key. The site is funded by display ads that appear around the tool but not inside the calculation flow.
Are my inputs saved?
No. Inputs stay in your browser tab. Closing the tab discards them. The site uses Google Analytics for traffic measurement (anonymized) but does not see what you type into the form.
Does the 10% include insurance, gas, and maintenance, or just the loan?
All of it. The rule is total transportation cost, not just the loan. For a $35,000 vehicle that is roughly: $565 loan (48 months at 7%, $7,000 down), $175 average full-coverage insurance (NAIC 2025), $180 fuel at 12,000 miles per year and 28 mpg with $3.40 gas, $60 maintenance (AAA), $30 registration. About $1,010 a month. At 10%, you need $10,100 gross monthly income, or $121,000 a year, to hit the rule cleanly.
Should I lease, finance, or pay cash?
Cash wins on total cost-of-ownership for vehicles kept 7+ years. Financing wins when the 0-2.9% promotional APR offered by manufacturers beats your invested-cash opportunity cost. Leasing usually loses on a 7-year horizon (you make 7 years of payments and own nothing) but can win if you turn over cars every 2-3 years anyway and want predictable maintenance. Edmunds 2025 data shows the average lease payment ($598) ran $130 below the average new-finance payment ($742).
How to use the Car Affordability
The Car Affordability is a browser-based tool that runs entirely on your device. Inputs you enter never reach a server - all calculations happen client-side in JavaScript. This means:
- Privacy: nothing is logged, sent, or stored by 3Tej. Inputs disappear when you close the tab.
- Speed: results update as you type. No network round trip.
- Offline use: once the page is cached, it works without internet.
- No signup: no account, no email, no rate limits.
Step by step
- Enter your inputs in the form above. Each field is labeled with its unit (currency, percent, kg, etc.) and the expected range.
- Read the result as it updates. The number reflects the formula commonly accepted in Car Affordability-related calculations.
- Adjust to see sensitivity: change one input at a time and watch how the output moves. This is the fastest way to understand which variable matters most.
- Copy or screenshot the result for later reference. The page state persists for the session if your browser allows it.
When you would use this
- Quick estimates: when you need a number now and don't want to open a spreadsheet.
- Sensitivity analysis: testing how a result changes as inputs vary, before committing to a real-world decision.
- Comparison: running the same calculation with different inputs to compare options side by side.
- Learning: building intuition for how the underlying math behaves.
- Documentation: capturing a snapshot of inputs and outputs at a point in time.