Car finance calculator

Not sure how much you can afford to spend to finance your next car? The BuyaCar finance calculator can help you work out the answer

Apr 23, 2020

Working out how much you can afford to spend on your next car is always a tricky job. Whether you've been dutifully saving money every month and are now considering how much of that to spend buying your next car, or you plan to finance your new one, establishing your budget can be a stressful process.

Thankfully there are now a number of tools available to help you work out how to bugdet for car finance costs, so you can get a feel for exactly the cash price of car you can afford for your monthly budget - letting you search for cars by cash price as well as finance monthly payments.

Enter your monthly budget, the length of contract you're looking for and your credit rating (if you're not sure, read our guide to how to find out your credit score here) and the calculator will show you what cash price of car you're likely to be able to afford with Hire Purchase or a loan. Meanwhile, if you want the lowest possible monthly payments, with the option to buy the car at the end of the contract, check out the PCP finance deals on BuyaCar by clicking on the link below.

Affording car finance payments

Whichever finance option you choose, you’ll need to be sure you can afford the monthly payments. Our guide to budgeting for a car using cash or finance will help you to work out how much you can afford to spend on your next car every month, to ensure you don't overstretch yourself. 

Having worked out how much you can afford to spend on finance payments each month, you can then use the BuyaCar finance calculator above to work out how much money you can borrow. Meanwhile, if you're looking to take out PCP finance, you can use the BuyaCar search tool to browse through cars by monthly payment. Once you find a suitable car you can click on it, scroll to the bottom of the page and use the PCP finance calculator to get a tailored finance quote.

In the meantime, keep reading for all the details on how to use the BuyaCar finance calculator for Hire Purchase and car loans to work out what you can afford to spend:

Get an idea of how much you can borrow

Starting with the monthly budget line, drag the marker to reflect how much you can afford to spend every month. Then, moving to the payment period line immediately below, drag the marker to the contract length you think best suits you - the longer the contract the lower your monthly payments, though you'll also end up paying a bit more in interest. There are four terms ranging from two to five years.

As you select a new contract length, you’ll see your monthly budget remains fixed but the amount you could borrow, changes. The longer the term, the more you can borrow for the same monthly amount. That’s good because you could purchase a newer and better car for the same monthly payment if you go for a longer contract. Just remember that a longer contract means you pay more overall in interest, too.

Know your credit score

Everyone has a credit score. This is an indication of how likely you are to pay the lender back - on time and in full. Your credit score is calculated by credit reference agencies who look at all your past and current borrowing, whether you've made payments on time for financial commitments such as mobile phone contract or a mortgage and whether you are on the electoral roll (which suggests you have a settled address).

Other factors considered include whether you have any county court judgements (CCJs) against you for things such as failing to pay fines and whether you are in a financial relationship - such as a partner - and what their rating is like. If your partner has a particularly low credit score, this could have a detrimental impact on your score.

From all this information the credit ratings agencies decide which of five ratings bands to place you in - representing the likelihood of you paying them back on time and consequently the chance you have of getting credit, and at what interest rate. Get a feel for whether your credit score is good enough to get car finance here.

You can find out your rating - each of the three main credit rating agencies give you their own score - by contacting MSE Credit Club which represents credit reference agency Experian, Clearscore which represents Equifax or Credit Karma which represents TransUnion. The first two agencies are more widely used by lenders. The services are free but some require you to sign up for a 30-day free trial.

Having established your rating, select the relevant category at the bottom of the BuyaCar Car Finance Calculator and you'll get a good indication of the type of interest rate you may be eligible for and the impact this has on how much you can borrow for your monthly budget.


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