Car Affordability Calculator

Affording a car is not the same as affording a car payment, and the gap between those two questions is where most vehicle budgets go wrong.

The payment is the visible cost. The invisible ones are insurance, fuel or charging, maintenance, tyres, registration, and depreciation — and depreciation is usually the largest of them despite never appearing as a bill. A new vehicle loses value fastest in its earliest years, and that loss is a real cost borne whether or not you ever sell. Two cars with identical monthly payments can differ substantially in total cost of ownership once these are included, so the comparison worth making is annual all-in cost rather than payment alone.

Various rules of thumb circulate — capping the payment at a share of take-home pay, or total vehicle costs at a share of income. They are conventions rather than measurements, and their value is mainly in forcing an explicit budget rather than in any specific percentage.

Beware of solving affordability by extending the term. A longer loan lowers the payment, raises total interest, and keeps you in negative equity longer, since a new car often depreciates faster than a long loan repays principal. If the affordable payment only works at six or seven years, that is generally a signal the vehicle is too expensive rather than that the term should be stretched.

Buying used shifts the depreciation curve materially: a vehicle a few years old has already absorbed its steepest decline, while typically retaining most of its usable life. Everything runs in your browser — no login, no upload, and no figure you enter leaves the page.