Car Affordability Calculator: What Can You Afford?

How much car can you afford?

You can afford the car whose monthly payment fits comfortably inside your budget after all your other bills. A common rule of thumb is to keep car costs — finance, insurance, fuel and tax — under about 15% of your take-home pay.

Lenders run their own affordability check under FCA rules, looking at your income and outgoings. This tool gives you the same starting point in seconds, with no credit check and no mark on your file.

What does a monthly budget buy?

A £300 monthly budget over 48 months at 9.9% APR buys roughly £11,950 of car finance. Stretch to £350 a month and that rises to about £13,940 — but the total you pay rises too.

Budget, car price and total cost compared

The bigger your monthly budget, the more car you can buy — but the more interest you pay in total. Compare the price against the total amount payable before you commit.

Adding a deposit lets the same budget buy a more expensive car — see how on the deposit calculator. To compare finance types for your number, use the PCP and HP calculators.

Budget for the running costs too

Your monthly budget should cover more than the finance — insurance, fuel, tax and servicing all add up. A car that fits your finance budget can still be unaffordable once you run it.

Add all of it together with the total cost of ownership calculator so your real monthly is no surprise.

• Insurance: often £40–£80 a month, more for newer or higher-powered cars.
• Fuel or charging: typically £100–£150 a month depending on your mileage.
• Tax, servicing and tyres: budget another £40–£60 a month on average.

Will a lender actually approve it?

This figure is indicative — a lender's decision depends on your income, outgoings and credit file, not just the monthly. Use it to set a realistic target before you apply.

When you are ready, get a closer estimate with our eligibility calculator, which also runs no credit check. A stronger credit score or a bigger deposit widens what you can borrow and lowers the rate.

Affordability vs eligibility — two different checks

Affordability asks whether you can afford the monthly; eligibility asks whether a lender will approve you at all. They use overlapping information but answer different questions.

Affordability is the maths of income minus outgoings — can the monthly fit inside what is left. A budget of £300 a month is affordable if £300 is genuinely spare each month after rent, food, bills and existing credit. This calculator answers that.

Eligibility is the lender's view of your likelihood of approval, driven mainly by your credit file and history. You can be affordable and still declined, or approved on a deal you cannot truly afford. Run both: use this page for the budget, then the eligibility calculator for the likelihood, with no credit check on either.

The 15% rule — and its limits

Keeping total car costs under about 15% of your take-home pay is a useful guide, not a lender's rule. It exists because car costs stack up faster than people expect.

On a take-home pay of £2,500 a month, 15% is £375 for everything car-related — finance, insurance, fuel, tax and servicing combined. If the finance alone is £350, there is almost nothing left for running the car, which is why the figure quickly strains a budget.

The rule breaks down at the extremes. A very low income makes 15% too small to finance anything safe; a very high income can comfortably exceed it. Treat it as a sanity check, not a ceiling — and always confirm against your real outgoings rather than a percentage.

How lenders run a real affordability check

Under FCA rules, a regulated lender checks your income, outgoings and credit file before approving finance — this tool is an indicative estimate, not that check. The lender's version is stricter.

Lenders follow the FCA's CONC sourcebook, which requires a reasonable assessment of creditworthiness. In practice they look at your net income, fixed commitments like rent and existing credit, your credit-reference file, and increasingly open-banking data that shows your actual spending.

That is why two people with the same monthly budget can get different outcomes: the lender weighs the full picture, including credit history and existing debts. Use this calculator to set a realistic target, then expect the lender to test it harder. You can soften the test with a bigger deposit or a stronger credit file.

Deposit, term and APR move the price

The same £300 monthly budget buys a very different car depending on the deposit, the term and the APR you secure. Each lever moves the price in a different way.

A bigger deposit adds straight to the car you can buy. A longer term stretches the same budget further — but pushes the total payable up sharply, because you pay interest for more months. A lower APR does both: more car and less total interest. This is the true-cost rule: always read the total column, not just the car column.

New vs used within the same budget

The same monthly budget buys a newer car at a lower rate or an older car at a higher rate — the price and the rate pull in opposite directions. Neither is automatically cheaper overall.

A £300 budget over 48 months might finance a £12,000 used car at 12.9% APR, or a £13,000 newer car at 6.9% APR on a subsidised deal. The newer car can be the better buy on the total amount payable despite the higher sticker price, because the lower rate saves hundreds in interest.

Run both numbers with the used car finance calculator and the new car finance calculator before you decide. The monthly is the same; the true cost is not.

Signs a monthly is too high

A monthly is too high when the finance payment alone crowds out running costs, or when one missed paycheque would break it. If either is true, step the budget down before you commit.

It is cheaper to find a lower monthly before you sign than to escape an unaffordable one after. If you are already in a deal that strains you, the refinance calculator shows whether a lower rate could ease it — or, once you have paid half, you have the right of voluntary termination.