How much car can I afford?

Start with the monthly budget

Use the amount you can consistently allocate to vehicle ownership rather than starting with a target vehicle price. Your budget should leave room for housing, food, debt repayments, savings and irregular expenses.

Separate the finance payment from running costs

A finance repayment is only one part of the cost. Insurance, fuel, maintenance, tyres, licensing, tolls and parking can materially change the monthly cost of owning a vehicle.

Use existing debt conservatively

Existing monthly debt reduces the income available for another repayment in a planning model. A calculator can illustrate the effect, but a lender may use a different affordability assessment.

Use a deposit carefully

A deposit reduces the amount financed. Compare the lower repayment with the cash you would have left after paying the deposit rather than assuming that a larger deposit is automatically better.

Run two scenarios

Try a base case and a more conservative case. Changing the assumed repayment, deposit or term can show how sensitive the vehicle budget is to your assumptions.

Related calculators