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How does a car affordability calculator work?

The affordability calculator uses the same variables but in reverse order. You enter your desired monthly payment (the amount you can afford) and fill in the known variables, like tax rate, license and document fees, interest rate, and loan term. The calculator computes the price of the car you can afford within those parameters.

How much can you afford a car?

The calculator computes the price of the car you can afford within those parameters. How much can I afford per month? The current wisdom from personal finance advisers is to limit your monthly car budget to less than 20% of your take-home pay. A car budget includes your car payment, insurance, fuel, maintenance, and repairs.

How do I use NerdWallet's car affordability calculator?

To use NerdWallet’s car affordability calculator, input the monthly car payment you’ve decided you can afford and the length of loan you want. Then select “new” or “used” and your credit tier. (You can check your credit score for free, if you don’t already know it.)

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