How much car finance can I comfortably afford?

The calculator runs a simple three-stage sum. First it subtracts your fixed monthly commitments — rent or mortgage, council tax, utilities, existing credit, childcare, subscriptions — from your net monthly income. What remains is your disposable income. Second, it applies the share you choose to that disposable figure to produce a monthly car budget. Third, it converts that budget into a maximum borrowing amount using an indicative APR over the term you set.

Nothing you type is stored, sent to a lender, or recorded against your credit file. The calculation happens entirely in your browser, which is why you can move the sliders freely and try scenarios that would be unwise to test with real applications.

1. 1

   Enter your net monthly income

   Use the figure that lands in your bank account after tax and pension, not your gross salary. If your income varies, use the average of your last three months rather than your best month.

2. 2

   Add your monthly commitments

   Include everything that leaves your account whether or not you drive: housing, bills, food, existing credit, childcare and regular subscriptions. Understating this is the single most common way people mislead themselves.

3. 3

   Choose how much of what is left goes on the car

   The default of 35% of disposable income is a sensible middle setting. Lower it if your income is variable or your emergency fund is thin.

4. 4

   Set the term you would realistically take

   Longer terms lower the monthly payment and raise the maximum borrow, but increase total interest. Compare 48 and 60 months before you settle.

The large figure is your monthly car budget — the amount you could direct at motoring without straining the rest of your finances. The band underneath tells you where that budget sits relative to your income, and it is the number worth paying attention to. A budget that lands in the comfortable band survives a boiler replacement or a slow month at work. One that lands in the risky band does not.

The maximum borrow figure is the cash price you could finance, not the total you will repay. Total payable is always higher because it includes interest across the full term. If you are comparing two cars, compare total payable rather than monthly payment — a longer term can make an expensive car look cheap month to month.

A lender's affordability assessment is more thorough than any calculator. Under FCA rules a lender must be satisfied that you can make the payments sustainably — meaning without borrowing further or falling behind on essentials. In practice that means they combine three sources of evidence.

• Declared income, cross-checked against payslips, bank statements or, for the self-employed, accounts and tax calculations.
• Your credit file, which shows existing credit commitments, payment history and how much of your available credit you are already using.
• Statistical expenditure benchmarks for a household of your size and location, used as a floor even if you declare lower spending.

This is why an application can be declined on affordability even when the credit score looks healthy. The score answers whether you repay; affordability answers whether you can. They are different questions and lenders assess them separately.

There are only four levers, and three of them are more useful than the one most people reach for.

1. Clear a small commitment. Closing a £60 a month credit agreement raises your disposable income and removes a line from your credit file at the same time — it improves both the calculation and the lender's view.
2. Increase the deposit. Deposit reduces the amount financed pound for pound, which lowers the monthly payment without extending the term.
3. Choose a cheaper car. Obvious, but the cars just below a price band often have far lower insurance and tax costs as well, so the saving compounds.
4. Extend the term. This works, but it is the lever with a cost — you will pay more interest overall and stay in negative equity for longer.