Figure out how much car you can afford and how long it will take to save for a down payment. Based on your income, expenses, and savings rate.
Once you sign up, your accounts, income, expenses, and goals update these numbers automatically.
Financial experts recommend the 20/4/10 rule: put at least 20% down, finance for no more than 4 years, and keep total transportation costs (payment + insurance + gas + maintenance) under 10% of gross income. If you earn $60,000/year, that's $500/month maximum for all car costs.
New cars lose 20-30% of their value in the first year and about 60% over five years. Buying a 2-3 year old certified pre-owned vehicle lets someone else absorb the steepest depreciation while you get a nearly new car with warranty coverage at a significant discount.
Paying cash eliminates interest costs and the risk of being underwater on your loan. However, if you can get a low interest rate (under 4-5%) and invest the cash difference at higher returns, financing can make mathematical sense. The behavioral benefit of no car payment is also significant.
Enter the car price as your target amount and the calculator shows how long it will take to save the full amount (or down payment) based on your current savings, monthly savings rate, and interest earned. Adjust the target to model different price points and see how each affects your savings timeline.
Saving for a $15,000 used car with $3,000 already saved, contributing $1,200/month at 4% interest: you'd reach $15,000 in about 10 months. Alternatively, saving $7,500 (50% down) takes just 4 months, after which you'd finance the remaining $7,500 with manageable payments.
Use the 20/4/10 rule as your benchmark: 20% down, 4-year max loan term, total car costs under 10% of gross income.
Model the full purchase price first, then try 50% and 20% down payment scenarios to see which timeline works best for your budget.
Factor in total ownership costs beyond the purchase price: insurance ($1,500-$3,000/year), fuel, maintenance, and registration. A cheaper car often saves thousands annually in ownership costs.
Consider that a $15,000 car driven for 8 years costs $1,875/year in depreciation, while a $40,000 car driven for 5 years costs $8,000/year. The used car wins on total cost of ownership almost every time.