Car loan affordability calculator
Lenders compare your car payment to your income and existing debts.
Estimated maximum vehicle price
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How this calculator works
- Convert your gross income to a monthly figure.
- Apply a 40% total debt service guideline to find the maximum you can devote to all debt payments.
- Subtract your existing monthly debt payments to find the amount left for a car payment.
- Convert that payment into a loan amount at your rate and term, then add your down payment.
Formula: Monthly car payment capped so total debt payments stay within 40% of gross monthly income
Frequently asked questions
What is a safe car payment?
A common guideline is to keep total debt payments, including the car, below 40% of gross monthly income. Lenders set their own limits and will assess your full credit profile.
Should I use a longer term to afford a more expensive car?
A longer term lowers the payment but increases total interest and the risk of owing more than the vehicle is worth. Compare the total cost of credit, not just the payment.
Does a larger down payment help?
Yes. A larger down payment reduces the amount financed, which lowers both the payment and the total interest, and reduces the risk of negative equity.
Sources
- Financial Consumer Agency of Canada — Financial Consumer Agency of Canada
Important legal information
Promissory.ca is not a lender, bank, mortgage broker or credit counsellor. We do not make lending decisions and we do not charge you a fee to use this service.
Submitting an application does not guarantee approval. All applications, rates and terms are set and approved solely by the individual lender or licensed professional.
Rates, fees and loan amounts vary by lender, province, loan type and your credit profile. Advertised rates are the lender's lowest offered rate and may not be available to you.
Lenders may perform a credit check with one or more credit bureaus, including Equifax and TransUnion. A hard credit inquiry may affect your credit score.
There is no obligation to accept any offer presented to you. Review every agreement carefully before signing.
Borrow only what you can reasonably afford to repay. Late or missed payments may result in additional fees, collection activity and negative credit reporting.
We handle personal information in accordance with the Personal Information Protection and Electronic Documents Act (PIPEDA). See our Privacy Policy for how we collect, use and protect your information.
If you are struggling with debt, consider contacting a non-profit credit counselling service or a Licensed Insolvency Trustee before borrowing more.
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