Car Repayment Calculator

How the Car Repayment Calculator Works

The monthly repayment on a vehicle loan is calculated using the standard loan annuity formula - the same formula used by all South African banks and vehicle finance companies. It determines the fixed monthly payment that will fully repay the principal plus all accrued interest over the selected term.

In the early months of a vehicle finance agreement, most of the monthly instalment goes toward interest. As the balance reduces, the interest portion shrinks and the principal portion grows - this is the natural amortisation curve. The principal/interest bar on the results page visualises this split for your specific loan.

The total cost column reveals the full financial picture: a R300 000 vehicle loan at 14% over 60 months costs approximately R419 000 in total repayments - R119 000 in interest alone. Extending the term to 72 months reduces the monthly payment by roughly R1 000 but increases total interest paid by over R20 000.

Use this calculator alongside the Car Finance Calculator (which adds deposits and balloon payments) when you are evaluating a specific purchase. This simpler version is ideal for quickly comparing different loan amounts or terms.

How to Use This Calculator

1. 1

   Enter the loan amount

   This is the amount you are financing - the vehicle price minus any deposit you are paying upfront. If you are refinancing an existing vehicle loan, use the current outstanding balance.

2. 2

   Enter the interest rate

   Use the annual interest rate on your finance agreement. South African vehicle finance rates are currently between 10.25% and 17% depending on your credit profile. Check the pre-agreement quotation (PQ) your bank is required to provide before signing.

3. 3

   Set the loan term

   Standard terms in South Africa are 48 or 60 months for new vehicles, and 36–48 months for older used vehicles. Banks typically will not finance vehicles older than 10 years at the end of the loan term.

4. 4

   Compare terms

   Run the calculation at 48, 60, and 72 months and compare the monthly payment and total interest. The difference in monthly payment between 60 and 72 months is often only R400–800, while the additional interest can be R15 000–25 000 - making the shorter term far better value if you can afford it.

Frequently Asked Questions

What is the current prime lending rate for vehicle finance in South Africa?

The prime lending rate is currently 10.25% (as at January 2026), following several SARB repo rate cuts since September 2024. Vehicle finance rates are typically expressed as a margin above or below prime - for example, 'prime plus 2.5%' would give an effective rate of 12.75%. The exact rate depends on your credit score, income, deposit, and the lender.

Should I choose a longer or shorter vehicle finance term?

A shorter term means higher monthly instalments but significantly less total interest and quicker equity in the vehicle. A longer term lowers the monthly payment but increases the total cost and the period during which the vehicle may depreciate faster than the loan balance - putting you at risk of negative equity (owing more than the car is worth). As a general rule, try to keep vehicle finance below 60 months if your budget allows.

Can I pay off my vehicle finance early in South Africa?

Yes - you can settle a vehicle finance agreement early by requesting a settlement letter (settlement balance) from the finance house. Under the NCA, an early settlement penalty of up to 3 months' interest may be charged if you settle within the first 12 months of the agreement. After 12 months, no penalty applies. Early settlement saves the remaining interest on the outstanding balance.

What is negative equity on a vehicle loan?

Negative equity occurs when the outstanding balance on your vehicle loan exceeds the market value of the vehicle. This happens because vehicles depreciate rapidly (new vehicles lose 15–25% in year one) while loan amortisation is slow in the early months (most payments go to interest). If you have a low deposit, balloon payment, or long term, negative equity can persist for years. It becomes a problem if you want to trade in or if the vehicle is written off by insurance.

Does comprehensive insurance affect my vehicle finance repayment?

Comprehensive vehicle insurance is not included in the monthly repayment shown by this calculator - but it is compulsory for any financed vehicle. The finance house requires you to maintain comprehensive cover for the duration of the agreement. Insurance premiums vary by vehicle value, driver age, area, and claims history - budget for an additional R600–R2 500/month on top of the finance instalment.

What happens if I miss a vehicle finance payment in South Africa?

Missing a payment triggers a default fee (typically R100–R200) and a negative listing at credit bureaux. After 20 business days without payment, the finance house can send a section 129 notice under the NCA requiring you to remedy the default or apply for debt review. If ignored, they can repossess the vehicle after obtaining a court order. Contact the finance house immediately if you are struggling - payment holidays and restructuring options are often available before legal action is taken.