How much car can I afford on my salary? Figures for every pay level

The short answer: keep your car finance payment to about 10% of your take-home pay, and no more than 15%. Running a car costs money on top, so keep all your motoring costs together to around a fifth of what you take home. On a £30,000 salary that’s a payment of about £201 a month, which finances a car of roughly £8,912 with a 10% deposit over four years at 9.9% APR. Stretch to 15% and it’s about £13,367.

Lenders don’t use a simple multiple of salary for car finance the way they do for mortgages. Below are the figures for every common salary, what a monthly budget actually buys, and the things that change the answer.

The figures by salary

These use take-home pay for 2026/27 in England, Wales and Northern Ireland, after Income Tax, National Insurance and a 5% workplace pension. The car price assumes Hire Purchase at 9.9% APR over 48 months with a 10% deposit.

For your exact take-home, including student loan, Scottish tax or a different pension, use the take-home pay calculator and take 10% of the monthly figure.

Why 10%, and what goes on top

The finance payment is only part of what a car costs you. Independent estimates for 2026 put average annual fuel at about £1,700 and a comprehensive insurance premium at around £700. Add road tax, an MOT, servicing, tyres and the odd repair, and running costs alone are often £200 to £300 a month before you’ve paid a penny of finance.

Take the £30,000 earner: a £201 payment plus £250 of running costs is about £451 a month, or 22% of take-home. At a 15% payment it’s about 27%. That’s why 10% is a comfortable target and 15% is a stretch. It leaves room for rent or a mortgage, bills, food and saving.

Your own costs depend on the car and where you live. A young driver in a city might pay three times the average insurance. An electric car charged at home costs far less per mile than petrol. Get an insurance quote before you agree to a car, not after.

What a monthly budget buys

If you know what you can pay each month, this is roughly how much you could borrow at 9.9% APR. Add your deposit to get the car price.

With PCP the same payment buys a more expensive car, because the balloon is left to the end. But you don’t own the car unless you pay the balloon, and you pay interest on it all the way through. Our balloon payment guide shows that trade in pounds.

How lenders decide how much to lend

There’s no rule like “four times your salary” for car finance. Under the Financial Conduct Authority’s rules on creditworthiness, a lender has to check you can afford the repayments without falling into difficulty. In practice they look at:

• Your income, usually checked with payslips, bank statements or credit reference data.
• Your regular outgoings: rent or mortgage, bills and living costs, sometimes estimated from official averages.
• Your other borrowing: credit cards, loans, other car finance and buy now pay later.
• Your credit file: missed payments, defaults, how much of your credit limits you use, and how long you’ve had credit.

Two people on the same salary can get very different offers. Someone with no other debt and a clean record might be offered a big loan at a low APR. Someone with a large credit card balance might get less, or a higher rate. The lender may approve you for more than 15% of your take-home. That doesn’t make it a good idea.

Things that change the answer

Your APR

A lower APR means more car for the same payment. At 9.9% APR, £300 a month over four years borrows about £11,946. At a credit-builder rate of 19.9% it borrows far less. Check your credit file for free before you apply, fix any errors, and use eligibility checkers that do a soft search so your file isn’t marked.

Your deposit

Every pound of deposit is a pound you don’t pay interest on. It also means you’re less likely to owe more than the car is worth, which matters if you need to sell early.

The length of the deal

Spreading the cost over longer cuts the payment but raises the total. On £15,000 at 9.9% APR:

Five years on a car that loses value fast can leave you owing more than it’s worth for most of the deal. If you need five years to make the payment work, the car may be too expensive for now.

New or used

A nearly new car lets someone else take the steepest drop in value, which usually happens in the first year or two. You often get a lot more car for the same budget, and many used car deals still come with a warranty.

A quick way to check a deal

1. Work out your monthly take-home with the take-home pay calculator.
2. Take 10% as your target payment and 15% as your ceiling.
3. Get an insurance quote for the exact car and add fuel and running costs.
4. Put the price, deposit, APR and term into the car finance calculator, and look at the total cost as well as the monthly payment.
5. If the payment only works over five years or with a big balloon, look at a cheaper car.

Common mistakes

• Budgeting on gross salary instead of take-home pay.
• Forgetting insurance, which can be more than the finance payment for young drivers.
• Buying on the monthly payment alone and never looking at the total amount payable.
• Taking the longest term on offer to reach a payment.
• Applying to lots of lenders at once and collecting hard searches on your credit file.

Next step

Once you’ve got a price in mind, compare the ways to pay. Our car loan vs car finance guide shows when a personal loan beats dealer finance, and PCP vs HP compares the two dealer options on the same car.

This is general information, not financial advice. The 10% and 15% figures are guides, not rules; lenders make their own checks.