Car Affordability Calculator
From your monthly payment budget, rate, term, cash and trade-in, work back to the maximum car price you can finance.
Input Data
Results
At a glance:Work backwards from an affordable monthly payment to the max car price. loan = payment / [r(1+r)^n / ((1+r)^n - 1)], r = rate/12, n = term x 12; max price = loan + cash + trade-in; total interest = payment x n - loan. Example: budget 6k/m, 5%, 5y, cash 80k, trade-in 20k → loan ≈ 318k, max price ≈ 418k, interest ≈ 42k. In Hong Kong, ownership also adds first registration tax, licence, insurance, fuel, parking. WARNING: Principal+interest only; keep payment within a safe income share (e.g. 20%) and leave room for other costs. Longer term lowers payment but raises interest. Education, not advice.
Formula
Loan = payment ÷ [r × (1+r)^n ÷ ((1+r)^n - 1)], r = rate/12, n = term × 12.
Max car price = loan + cash + trade-in.
Total interest = payment × n - loan.
$$L = M \times \dfrac{1 - (1+r)^{-n}}{r},\quad r = \dfrac{\text{annualRate}}{12}$$$$\text{MaxPrice} = L + \text{Cash} + \text{TradeIn}$$$$\text{Interest} = M \times n - L$$How to Use
- Enter the monthly payment you can afford.
- Enter the rate, term, cash down and trade-in.
- View the implied loan, max car price and total interest.
FAQ
How does the budgeted payment drive the car price?
The calculator derives the loan you can service from the payment, then adds cash and trade-in to get the max car price. A higher budget, lower rate or longer term raises the price you can afford; a larger cash/trade-in also raises it directly. Always set the budget from your real cash flow, not the showroom's pitch.
What other car costs should I budget in Hong Kong?
Beyond the financed principal+interest, Hong Kong ownership adds first registration tax (based on taxable value, with a tiered rate and an EV concession), annual licence fee, compulsory third-party + own-damage insurance, fuel/electricity, parking and tolls. These can rival the finance cost, so budget the full monthly ownership cost, not just the instalment.
How much of my income should the payment be?
A common rule keeps total vehicle spending within about 20% of take-home pay, and the finance payment well under that. In high-cost Hong Kong, be conservative — a payment that looks fine can crowd out rent, MPF savings and emergencies. Test the payment against your full budget.
Does a longer term really help?
A longer term lowers the monthly payment and helps qualify for a pricier car, but total interest rises and you stay in debt longer. Often it is better to buy a cheaper car or save a bigger down payment than to stretch the term. Compare total interest across terms.
Is a trade-in worth it vs selling privately?
A trade-in is convenient and fast but usually nets less than a private sale. The convenience may be worth the gap for some; others sell privately to raise more down payment and lower the loan. Weigh the time/effort against the extra cash, and make sure the trade-in value is fairly stated against the new car's price.
Related Tools
References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.