How the car finance calculator works
Last updated 9 November 2026
Vehicle finance in South Africa is usually an instalment sale agreement. The bank pays the dealer, and you pay the bank back each month with interest until the car is yours. This calculator works out that monthly instalment and the full cost of the deal.
It starts with the vehicle price and takes off your deposit and the value of any trade-in. What is left is the amount you finance. If you choose to add the initiation fee to the loan, it is included in that amount too, and you pay interest on it.
Interest is worked out monthly on the balance you still owe, at the yearly rate divided by 12. The calculator finds the fixed instalment that pays the loan down to zero by the end of the term, or down to the balloon amount if you choose one. The monthly service fee is then added to every instalment.
The default rate is prime plus 2 percentage points, which is 12.75%. Your own rate depends on your credit record, deposit and the bank, so change it to the rate on your quote.
Worked example
Say you buy a car for R 400 000 with no deposit or trade-in, at 12.75% over 72 months, with no fees and no balloon. These are the calculator’s starting values.
- You finance the full R 400 000.
- The monthly instalment comes to R 7 976.96.
- Over 72 months you pay R 574 341 in total, of which R 174 341 is interest.
Now add a 30% balloon on the same car. The balloon is R 120 000, which you still owe after the last instalment. The instalment drops to R 6 858.87, a saving of R 1 118.09 a month. But because you keep paying interest on the balloon for the whole term, total interest rises to R 213 839, which is R 39 498 more than with no balloon.
What the figures mean
- Amount financed is what you borrow: the price less your deposit and trade-in, plus the initiation fee if you finance it.
- Monthly instalment is what leaves your account each month: the loan repayment plus the monthly service fee.
- Balloon payment (also called a residual) is a lump sum, set as a percentage of the price, that you still owe at the end. It lowers your instalments, but you must settle it, refinance it or trade the car in.
- Total interest is everything you pay the bank on top of the amount you borrowed.
- Total cost of the car adds up your deposit, trade-in, every instalment, fees paid upfront and any balloon. It shows what the car costs you once everything is paid.
Things to watch
- A balloon makes a car look cheaper each month, but it costs more interest overall. At the end you may owe more than the car is worth, because cars lose value quickly.
- A longer term lowers the instalment but adds interest. Try a shorter term in the calculator to see the difference in total interest.
- Vehicle finance rates usually move with prime, so your instalment can go up or down when the Reserve Bank changes the repo rate. The next rate decision is on 19 November 2026.
- Banks usually require comprehensive car insurance while the car is financed. That cost is not included here.
- A bigger deposit lowers both the instalment and the total interest. If you’re saving up for one, the savings goal calculator shows how much to put away each month.
- Check what the instalment leaves you with after tax using the take-home pay calculator.
Sources
The default rate is built from the prime lending rate of 10.75%, effective 25 September 2026, plus a typical margin. The instalment uses the standard loan formula, with a balloon where you choose one, and interest worked out monthly. All figures were last checked on 9 November 2026, and the full list of sources is at the bottom of this page.