About the Car Affordability calculator
How much car can I afford? This car affordability calculator for South Africa adds up the finance instalment, insurance, fuel and maintenance, then compares the true monthly ownership cost to your income.
How the Car Affordability calculator works
The finance amount is the vehicle price minus your deposit or trade-in. A balloon (residual) percentage, if any, is a lump sum left owing at the end of the term.
The monthly instalment uses the amortising-loan formula with the balloon discounted to present value — a balloon lowers the instalment but increases the total finance cost.
Total monthly ownership cost adds insurance, fuel and maintenance to the instalment, because the true cost of a car is far more than the repayment alone.
The affordability signal compares total ownership cost to gross monthly income: above roughly a quarter flags "maybe", above about a third flags "no".
The Car Affordability calculator formula
- Finance amount
vehicle price − deposit- Monthly instalment
(finance amount − balloon PV) × r ÷ (1 − (1 + r)⁻ⁿ)r = annual rate ÷ 12, n = term in months, balloon PV = balloon ÷ (1 + r)ⁿ.- Total monthly ownership cost
instalment + insurance + fuel + maintenance- Ownership cost to income
total monthly ownership cost ÷ gross monthly income
Worked example
A buyer puts down a deposit on a hatchback financed over six years and checks whether the all-in monthly cost is affordable.
A R300 000 car on a R35 000 monthly income
| Monthly gross income | R 35 000,00 |
|---|---|
| Vehicle price | R 300 000,00 |
| Deposit / trade-in | R 50 000,00 |
| Interest rate | 13.00% |
| Finance term | 6 years |
| Balloon / residual | 0.00% |
| Insurance (monthly) | R 1 500,00 |
| Fuel / charging (monthly) | R 3 000,00 |
| Maintenance (monthly) | R 1 000,00 |
Results
- Monthly instalment
- R 5 018,53
- Total monthly ownership cost
- R 10 518,53
- Affordability signal
- MAYBE
- Finance amount
- R 250 000,00
- Balloon / residual amount
- R 0,00
- Total vehicle cost
- R 411 333,89
- Total finance cost
- R 111 333,89
- Ownership cost to income
- 30.05%
Key terms
- Balloon / residual
- A percentage of the finance amount deferred to a final lump-sum payment, lowering monthly instalments but increasing total cost.
- Instalment
- The fixed monthly repayment on the vehicle finance agreement.
- Total cost of ownership
- Instalment plus insurance, fuel, maintenance and licensing — the real monthly cost of running the car.
- Affordability ratio
- Total monthly car cost divided by gross income. Keeping it below about a quarter is a common guideline.
Frequently asked questions
What is balloon / residual finance?
A balloon payment is a lump sum still owed at the end of the finance term. It lowers monthly instalments but means you must refinance or pay the amount at the end.
How much car can I afford on my salary?
A common guideline keeps total car costs — instalment, insurance, fuel and maintenance — below about a quarter to a third of gross income. Enter your figures to see the signal.
Are insurance and fuel included?
You enter monthly estimates for insurance, fuel and maintenance, and they are added to the instalment in the total ownership cost.
What fees are excluded?
Finance initiation, monthly admin and licensing fees are not included — add a margin to your figures to cover them.