Debt-to-Income Ratio Calculator To Buy A Car

Last Updated: Jun 21, 2025

Created by

Saqib Hanif

Saqib Hanif is the CEO and founder of Calculator Value. He builds calculators and educational content across sports, math, and science, and supports a limited set of construction-related calculators. Read full profile

The Debt to Income Ratio Calculator for Car Purchases helps determine if your car payment is affordable based on your income and existing debts.

Key Formulas

Current DTI Ratio = (Total Monthly Debt ÷ Monthly Income) × 100
Projected DTI Ratio = (Total Monthly Debt with New Car Payment ÷ Monthly Income) × 100
Car Payment as % of Income = (Car Payment ÷ Monthly Income) × 100

DTI Guidelines

Most lenders prefer a DTI ratio of 50% or less
Car payment should be less than 15% of monthly income
Total car expenses should be under 20% of income

Risk Levels

Low Risk: DTI below 50%
High Risk: DTI between 50-60%
Very High Risk: DTI above 60%

Example

Inputs:
Gross Monthly Income: 5,000 dollars
Housing Payment: 1,500 dollars per month
Other Debt Payments: 800 dollars per month
Proposed Car Payment: 400 dollars per month
Loan Term: 5 years
Interest Rate: 6%
Auto Insurance: 100 dollars per month
Running Costs: 150 dollars per month
Key Results:
Current DTI Ratio: 46%
Projected DTI Ratio: 54%
Car Payment as % of Income: 8%
Total Car Expenses: 13% of income
Risk Assessment: High Risk

This calculator helps you make informed decisions about car financing that fit your budget.

Industry-Standard Formulas: The formulas and methods used in this calculator follow widely accepted standards in Financial.
Careful Verification: The calculator is tested to ensure it behaves correctly across a range of inputs.
Continuous Updates: The calculator is updated as needed to reflect better accuracy and usability.

Related Calculators

Debt to Equity→Debt-to-Income Ratio Calculator for Apartment→Credit Card Balance Transfer→Debt-to-Income Ratio Calculator to Buy a House→

Are you planning to buy a car but worried about whether you can afford it or get approved for a loan based on your financial situation? Don’t worry—we have built one of the most important and comprehensive Debt-to-Income (DTI) Ratio calculators specifically for checking car affordability. In this guide, we will cover:

What is a Debt-to-Income Ratio, and how does it work?
What is a Debt-to-Income Ratio Calculator for a Car Loans?
A real-world example
Don't miss the most important FAQs

Person calculating debt-to-income ratio to buy a car

What is Debt-to-Income Ratio? — How it works

The Debt-to-Income (DTI) Ratio is a financial measure that tells how much of your monthly gross income goes toward debt payments. Here’s how it’s calculated:

Formula:

DTI (%) = (Total Monthly Debt Payments / Gross Monthly Income) × 100

For instance, if you earn 5,000 dollars per month and pay 1500 dollars in debt, your debt-to-income ratio is 30%.

What is a Debt-to-Income Ratio Calculator for a Car Loan?

The Debt-to-Income Ratio Calculator is an online tool specifically designed to assess car affordability based on:

Gross salary income (monthly or annual)
Proposed car payment
Existing debts (housing, car, other loans)
Auto loan term
Interest rate
Optional maximum DTI threshold, running costs, and insurance

The calculator doesn’t just give you DTI ratios—it also provides key insights like:

Whether your projected DTI is affordable and healthy or risky
How much car loan you might be able to afford
If you're spending too much of your monthly income on buying a car
and much more.

Real-World Example

Gross monthly income: 6,000 dollars
Proposed car payment: 500 dollars
Existing car payment: 0
Rent: 1,200 dollars
Other debt: 500 dollars
Insurance: 100 dollars
Running costs: 80 dollars
Loan term: 5 years
Interest rate: 6%

Brief Result:

Projected DTI: 36.67% → Below the 50% limit (✓ Good)
Car Payment as % of Income: 8.33% → Well below the 15% guideline (✓ Good)
Total Car Expenses as % of Income: 11.33% → Below the 20% recommendation (✓ Good)
Maximum Affordable Car Payment: 1,300 dollars
Loan Amount Possible at 500/month: ~25,862 dollars

The calculator shows that this car is affordable. You would still have 3,620 dollars left after covering the new car payments and all other debts.

Frequently Asked Questions

How Do You Calculate the Debt-to-Income Ratio for a Car Loan?

Calculating your debt-to-income ratio for a car loan is straightforward. Use the following formula:

DTI (%) = (Monthly Debt Payments + Proposed Car Payment) / Monthly Gross Income × 100

Monthly Gross Income: Your monthly income before any taxes or insurance
Monthly Debt Payments: These are debts you pay each month before buying a car—like housing, credit cards, student loans, etc.
Proposed Car Payment: The amount you are expected to pay toward your car loan each month.

What is a good debt-to-income ratio for a car loan?

Below 36% is generally considered an excellent DTI, while 36% to 43% is acceptable. here is further breakdown of DTI levels:

Below 36%: Excellent
36%-43%: Acceptable
43%-50%: Risky, but still considered
Above 50%: Most lenders will reject the loan

What is the maximum debt-to-income ratio for a car loan?

The most commonly accepted maximum DTI ratio is 50%. This includes all your debts, including your new car payment.