Calculator
Car Finance Affordability Calculator
Start with your budget, not the car you want. Enter what you can afford per month and see what price of car that supports on PCP, HP, or a personal loan.
Your details
PCP result
Total Amount Payable
£29,386.98
This is the total that leaves your account — deposit + all payments + balloon
Representative Example
The question isn't "can I afford the monthly payment?" — it's "can I afford the total cost?"
A £300/month PCP payment on a £25,000 car sounds manageable. But the total outlay — deposit, 48 payments, and the £10,000 balloon — is £24,400. If you can't comfortably handle that total commitment, you can't afford the car.
The 20/4/10 rule
This is a widely used framework for responsible car buying:
- 20% deposit — reduces what you borrow and may unlock better APR rates.
- 4-year maximum term — keeps total interest reasonable and avoids being in negative equity.
- 10% of gross income — total vehicle costs (payment + insurance + fuel + maintenance) shouldn't exceed 10% of your gross monthly income.
£25,000 salary
10% = £208/month total
Max car: ~£8,000–£12,000
£35,000 salary
10% = £291/month total
Max car: ~£12,000–£18,000
£50,000 salary
10% = £416/month total
Max car: ~£18,000–£28,000
These ranges assume 20% deposit, 48-month term, ~6% APR, and ~£100/month for insurance, fuel, and maintenance. Your actual numbers will vary — that's what the calculator is for.
What lenders actually check
Since 2014, the FCA requires motor finance companies to assess affordability before approving you. They look at:
- Income — salary, benefits, pensions, rental income. Self-employed applicants typically need 2 years of accounts or SA302 forms.
- Committed expenditure — rent/mortgage, existing credit commitments, utilities, council tax.
- Disposable income — what's left after committed spend. The finance payment must fit within this with headroom.
- Credit file — not just the score, but the pattern. Recent defaults, CCJs, missed payments, and the total amount of outstanding credit all factor in.
Some brokers now use Open Banking — with your consent, they view your actual bank transactions to assess real spending patterns rather than relying on estimates. This can work in your favour if your credit score is poor but your actual spending is responsible.
The costs people forget
The monthly payment is not the total cost of running a car. Before you decide what you can afford, add:
- Insurance — average UK car insurance is £924/year (ABI, 2025). For young drivers or high-group cars, it's significantly more.
- Fuel or electricity — budget £100–£200/month for petrol/diesel, or £30–£80 for an EV depending on mileage.
- Road tax (VED) — £0 for EVs registered before 2025; £190/year standard rate for most others.
- Maintenance and tyres — budget £50–£100/month for a used car.
- MOT — £54.85 maximum fee, plus any repair costs to pass.
Cheaper car or longer term?
If the car you want doesn't fit your budget, you have two options: a cheaper car, or a longer term. A cheaper car is almost always better. Extending the term from 48 to 60 months reduces the monthly payment but increases total interest significantly — and puts you at risk of negative equity for longer.
A £12,000 car at 6.9% over 48 months costs £2,000 in interest. The same car over 60 months costs £2,500. That extra year costs you £500 and gives you nothing — the car depreciates the same either way.