How much car can I afford?
A useful rule: keep the finance payment to about 10% of your take-home pay, and all car costs (finance, insurance, fuel, tax, servicing) under about 20%. On a £30,000 salary that means a payment of up to about £209 and no more than £419 a month in total.
Monthly cost by car price.
Hire purchase with a 10% deposit, 9.9% APR over 48 months. The last column adds an example £230 a month for running costs (insurance, fuel, tax, servicing and MOT); yours may be higher or lower.
| Car price | Deposit (10%) | Finance payment | Total interest | With running costs |
|---|---|---|---|---|
| £8,000 | £800 | £180.81 | £1,479 | £411 |
| £12,000 | £1,200 | £271.21 | £2,218 | £501 |
| £16,000 | £1,600 | £361.62 | £2,958 | £592 |
| £20,000 | £2,000 | £452.02 | £3,697 | £682 |
| £25,000 | £2,500 | £565.03 | £4,621 | £795 |
| £30,000 | £3,000 | £678.03 | £5,546 | £908 |
What each salary can comfortably afford.
The finance payment is capped at 10% of take-home pay, and also at 20% minus £230 of running costs, whichever is lower. This is roughly the car price (10% deposit, 9.9% APR, 48 months) whose payment fits:
| Salary | Take-home a month | All car costs (20%) | Finance payment | Car price that fits |
|---|---|---|---|---|
| £22,000 | £1,613 | £323 | £93 | about £4,000 |
| £25,000 | £1,793 | £359 | £129 | about £5,500 |
| £30,000 | £2,093 | £419 | £189 | about £8,000 |
| £40,000 | £2,693 | £539 | £269 | about £11,500 |
| £50,000 | £3,293 | £659 | £329 | about £14,500 |
If your rent or mortgage is already high, or you pay for childcare or other debts, aim lower. Buying a cheaper car outright, or saving up for one, avoids interest altogether.
The costs that are easy to forget.
| Cost | How to estimate it |
|---|---|
| Insurance | Get real quotes before you buy. Age, postcode and car group change it hugely. |
| Fuel or charging | Yearly miles ÷ miles per gallon × fuel price per gallon, or kWh used × your electricity rate. |
| Vehicle tax (VED) | Depends on the car's age, CO₂ and list price. Electric cars now pay VED too. |
| Servicing, MOT and tyres | Set aside a monthly amount; older cars usually need more. |
| Depreciation | Most new cars lose a large part of their value in the first three years. |
The car finance calculator works out payments and total cost; the affordability calculator checks it against your whole budget.
Car affordability FAQs
Should my car cost less than half my salary?
That is a common rule for the purchase price. The monthly test (finance under about 10% and all car costs under about 20% of take-home pay) is usually more useful, because it includes running costs.
Is a longer finance term better?
Lower payments, more interest. £16,000 at 9.9% APR with a 10% deposit costs £461.12 a month over 36 months or £302.27 over 60 months.
Is PCP cheaper than hire purchase?
PCP has lower monthly payments because a large final ‘balloon’ payment is left at the end. If you want to keep the car, the total cost is often higher.
MoneyHelper: buying a car · GOV.UK vehicle tax rates. Figures are worked examples for planning, not financial advice.