The Finance AlgorithmTFA

Car Affordability Calculator

Calculator

Calculate how much car you can afford based on your income and expenses

Free to useNo data storedAI insightsUpdated: February 2026

Before you fall in love with a car, make sure you can afford it! This calculator helps you work out a realistic budget based on your income, expenses, and the true cost of car ownership.

Enter Your Details

Enter Your Details

$

Your take-home pay each month

$

Rent, bills, food, existing debts

$

Fuel, insurance, rego, servicing for current car

$

Expected fuel, insurance, rego for new car

$

Savings or trade-in value you can put toward the car

%

Rate you expect to get

Real-World Examples

First Car Buyer

Jake earns $4,500/month after tax, has $2,800 in expenses, and $3,000 for a deposit.

Inputs:

income:4,500expenses:2,800deposit:3,000
With $1,700 buffer minus ~$400 running costs, Jake can afford ~$350/month loan payment. That's about a $20,000 car with deposit.

Upgrading Family Car

The Smiths have $8,000/month income, $5,500 expenses, currently spend $450 on their old car, and have $15,000 deposit.

Inputs:

income:8,000expenses:5,500currentCar:450deposit:15,000
Budget allows ~$600/month on car costs. With $500 running costs, $600 loan payment is comfortable. They can afford ~$45,000 car.

Frequently Asked Questions

Glossary

Running Costs
Ongoing car expenses including fuel, insurance, registration, servicing, and repairs.
On-Road Costs
One-time costs when purchasing including stamp duty, dealer delivery, and registration setup.
Debt-to-Income Ratio
The percentage of your income going to debt repayments - lenders use this to assess affordability.

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026

How to Use
  1. Enter your monthly income after tax
  2. Add your current monthly expenses
  3. Include your current car costs (if upgrading)
  4. Estimate the new car's running costs
  5. Add any deposit or trade-in value
Key Information
  • Total car costs (loan + running) shouldn't exceed 15-20% of income
  • Running costs add $150-$500+ per month depending on the car
  • A bigger deposit means lower repayments and less interest
  • New cars have higher insurance but may have lower servicing costs
Pro Tips
  • Don't forget about stamp duty, registration, and insurance when budgeting
  • Budget for at least $2,000/year in maintenance and unexpected repairs
  • Fuel costs vary hugely - factor in your commute distance
  • Leave some buffer for lifestyle - don't max out your budget
Avoid These Mistakes
  • Only budgeting for the loan payment, not running costs
  • Underestimating insurance costs for newer or sports cars
  • Forgetting about annual expenses like rego and servicing
  • Stretching to the absolute maximum budget with no buffer
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