The Finance Algorithm

Car Affordability Calculator

Work out the car price your budget supports from your income, expenses, running costs and your own limit on car spending

Updated October 2026Built and checked by MaverickHow it's calculatedReport an error

Your numbers

Updates as you type
$
$6k

Your take-home pay each month

$
$4k

Rent, bills, food and debt repayments, including your current car's costs if you have one

$
$0

Monthly fuel, insurance, rego and servicing for the car you're replacing. These stop once it's sold, so they're freed up for the new car

$
$500

Your monthly estimate of fuel or charging, insurance, rego and servicing for the new car. Get an insurance quote and check rego for your state

$
$5k

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

%
7.5%

The rate you've been quoted, or one from the published car loan rates. Lenders price each applicant individually

5y
%
15%

The most of your take-home pay you're prepared to spend on loan repayments and running costs combined. There's no official figure: set your own

The button asks our AI to explain these figures in words.

Car affordability

Affordable car price

$24,962

incl. $5,000 deposit

Max loan

$19,962

@ 7.5% × 5yr

Monthly budget

$900

$400 loan + $500 running

Budget check

Within your limit

car costs at 15% of pay

Maximum affordable price

Your limit caps loan repayments plus running costs at 15% of take-home pay; the cash flow ceiling uses every dollar left after expenses. The price shown is the lower of the two.

$24,96215% of payyour limit$104,811Cash flowall spare cash

Where your income goes at the affordable price

Loan repayment + new car running costs + other expenses + surplus = monthly income.

$6,000net monthly income
Living expenses58.3%
Car running costs8.3%
Loan repayment6.7%
Surplus26.7%

Same monthly budget, different terms

A longer loan supports a pricier car for the same repayment, but you pay more interest in total.

$9,6111yr$17,8593yr$24,9625yr$31,0797yr
Don't forget on-road costs. Stamp duty, registration, CTP insurance and dealer delivery are paid when you buy, on top of the car's price. Rates differ by state, so check your state's revenue office and budget for repairs as well as servicing.

How it works

The price of a car is only part of what it costs. Moneysmart suggests working out exactly how much you can spend before you shop, counting the other costs of buying and running a car: stamp duty, registration, insurance, fuel or charging, servicing and repairs. This calculator takes your take-home pay, your expenses and your estimate of the new car's running costs, then finds the car price two limits allow: your own cap on car spending as a share of pay, and the cash you actually have left each month. The lower of the two sets the price, given your deposit, loan rate and term. There's no official rule for how much of your income a car should take, so the cap is yours to set.

  1. 1Enter your monthly take-home pay and your monthly expenses, including your current car's costs if you have one.
  2. 2Enter your current car's running costs, which stop when you replace it.
  3. 3Estimate the new car's monthly running costs from an insurance quote, your state's rego and the car's fuel use.
  4. 4Add your deposit or trade-in, the loan rate and the term.
  5. 5Set the most of your pay you want car costs to take, and see the car price that fits.

The figures today

As of 7 November 2026, the lowest car loan rate from a bank or lender is 5.74%, from Westpac's Car Loan, while the typical best across 42 institutions is 6.99%. The lowest carmaker finance rate is 2.70%, from Chery Motor Finance's Chery 4.46% EV Comparison Rate Offer, while the typical best across 12 institutions is 4.99%.

Car loan rates

Worked examples

First Car Buyer

Jake takes home $4,500 a month, has $2,800 in expenses and $3,000 saved. He expects the car to cost $400 a month to run, and caps car costs at 15% of his pay. Loan at 7.5% over 5 years.

Monthly income (after tax)
$4,500
Monthly expenses
$2,800
New car running costs
$400
Deposit / trade-in available
$3,000
Expected interest rate
7.5%
Preferred loan term (years)
5
Your limit on car costs (% of take-home pay)
15%

15% of $4,500 is $675 a month for the car. After $400 of running costs, $275 is left for repayments, which supports a loan of about $13,700. With his $3,000 deposit, that's a car of about $16,700, leaving him $1,025 a month spare.

Upgrading the Family Car

The Smiths take home $8,000 a month and spend $5,500, including $450 on their current car. The new car will cost $500 a month to run, they have a $15,000 deposit and cap car costs at 15% of pay. Loan at 7.5% over 5 years.

Monthly income (after tax)
$8,000
Monthly expenses
$5,500
Current car running costs
$450
New car running costs
$500
Deposit / trade-in available
$15,000
Expected interest rate
7.5%
Preferred loan term (years)
5
Your limit on car costs (% of take-home pay)
15%

Their cap allows $1,200 a month: $500 to run the car and $700 for repayments, a loan of about $34,900. With the deposit, they can spend about $49,900. At a 20% cap the figure rises to about $69,900, still within the $2,950 a month their budget frees up.

Questions people ask

How much of my income should go to car costs?
There's no official rule. The calculator lets you set your own limit and checks it against the cash you actually have left after expenses. A lender will assess your income, expenses and debts when you apply, and may lend less than this calculator shows.
Should I include my trade-in as a deposit?
A trade-in reduces the amount you need to borrow in the same way as a cash deposit. If you still owe money on the car, only the value above what you owe counts.
How do I estimate running costs?
Get an insurance quote for the car, check registration for your state, and multiply the car's fuel use by the kilometres you drive and your local fuel price. Add servicing and tyres from the manufacturer's service schedule. Moneysmart notes that servicing, tyres and unexpected repairs can cost hundreds of dollars a year.

The terms, in plain English

Running Costs
Ongoing car expenses including fuel or charging, insurance, registration, servicing, tyres and repairs.
On-Road Costs
One-off costs when buying a car, including stamp duty, registration and dealer delivery.
Comparison Rate
A single rate that combines a loan's interest rate with most of its fees, so loans of the same amount and term can be compared.

Official sources

Car Loan Calculator

Calculate exact repayments for your budget

Total Cost of Ownership

Full cost including all running expenses

New vs Used Calculator

Compare affordability of new vs used