Guide 01 of 05
What Can I Really Afford
A simple way to set a car budget that includes the costs that continue after you drive away.
Short answer Start with the total cost of owning the car, not the advertised price or the weekly repayment. Set one limit for buying the car and another for keeping it on the road. If either limit feels tight, the car is too expensive for your current budget.
Work Out Your Upfront Limit
Add every amount you may have to pay before the car is yours and ready to use.
- Purchase or drive away price
- Stamp duty and registration transfer fees if they are not included
- Registration that is due soon
- Insurance before collection
- Independent inspection and PPSR search for a used car
- Immediate tyres servicing or repairs
- A repair buffer that remains in your account after the purchase
Estimate The Ongoing Cost
Turn annual bills into monthly amounts so they are easier to compare with your income.
- Registration and compulsory insurance
- Comprehensive or third party property insurance
- Fuel or charging based on your normal travel
- Scheduled servicing plus an allowance for wear items such as tyres brakes and batteries
- Parking tolls and roadside assistance where relevant
- Loan repayments and any account fees
Use This Simple Budget Test
- List your reliable monthly income after tax.
- Subtract housing food utilities existing debts savings and other essential spending.
- Subtract the estimated monthly running cost of the car.
- Check that the remaining amount still covers unexpected expenses and ordinary life.
- Repeat the calculation using a higher insurance quote and an unexpected repair. If the budget fails easily choose a cheaper car.
If You Are Borrowing
- Compare the interest rate fees loan term and total amount repayable.
- Do not judge a loan by the weekly repayment alone. A longer term can make the repayment look smaller while increasing the total cost.
- Check whether the loan has a balloon payment early repayment fee or security over the car.
- Get quotes away from the dealership so you have something to compare with dealer finance.
- Leave room in the budget for the car to lose value faster than the loan balance falls.
Warning Signs
- The deal only works if nothing goes wrong
- You need to use savings set aside for rent bills or emergencies
- The salesperson keeps bringing the conversation back to a weekly payment
- You do not know the total amount repayable
- Insurance or registration costs have not been checked
- You would have no money available for tyres servicing or repairs
Bottom line A car is affordable only when you can buy it run it and handle a reasonable surprise without missing other commitments. Your maximum purchase price should come from that calculation rather than from the amount a lender offers.
General information for Australian car buyers. Laws, fees and registration processes vary between states and territories. Check current government information and get professional advice where needed. Last reviewed 14 September 2026.