Car finance affordability calculator
Start from what you can spend on motoring each month, take off insurance, fuel, tax and servicing, and see what is left to finance a car with.
How this is calculated
The monthly budget is treated as the whole cost of running a car, not just the finance payment, because insurance, fuel, tax and servicing are what catch people out.
Running costs are converted to a monthly figure and taken off first. Whatever remains is the payment the finance is sized against.
The amount financeable is the present value of that payment over the term at the APR you enter, which is the standard amortisation calculation run backwards.
A PCP agreement works differently: part of the value is deferred to a balloon payment at the end, so PCP reaches a higher car price for the same monthly figure without you owning the car.
Rates used · 2026/27
| Typical used car APR | 7% to 13% |
| Typical new car APR | 0% to 8% |
| Common terms | 36, 48 or 60 months |
| Standard vehicle tax | £195 a year |
Last checked July 2026. Source: HMRC and gov.uk.
Worked example
On a £400 monthly budget with £700 insurance, £120 fuel, £195 tax and £450 servicing, running costs take £232 a month, leaving £168 for finance. Over 48 months at 9.9% that supports about £6,600 of borrowing, so £8,600 of car with a £2,000 deposit.
Common questions
Why include running costs at all?
Because a car you can finance is not the same as a car you can afford. Insurance alone can exceed the finance payment on a first car.
Does this cover PCP?
Not yet. PCP needs a balloon payment input and a different calculation, so it belongs in its own calculator rather than as an option on this one.
Should the deposit come out of savings?
That is a personal call, but a larger deposit reduces both the amount financed and the total interest paid over the term.
Why does a longer term make the car cheaper each month but worse overall?
Spreading the same borrowing over more months lowers each payment but adds months of interest, so the total paid rises.