Buying a car
in South Africa.

What is the prime lending rate in South Africa right now?

As of May 2026, the SA prime lending rate is 10.25%. It is calculated as the SARB repo rate (currently 6.75%) plus a fixed 3.50% bank margin. Vehicle finance is priced at prime plus a spread — typically prime + 1% for top-tier credit on a new car (11.25%), prime + 2% for the average buyer (12.25%), and prime + 3% to + 5% for sub-prime or used-car finance. The default in our calculator (prime + 2%) reflects what a buyer with average credit and a 10% deposit on a new car actually gets quoted across WesBank, MFC, Standard Bank VAF and Absa.

How much car can I afford on my salary in South Africa?

SA banks coach customers around two affordability rules. First, your monthly vehicle instalment should not exceed 25% of your gross monthly income (looser than the 30% bond rule because cars depreciate). Second, your total monthly debt — bond, car, credit cards, personal loans — should not exceed 36% of gross income, which is the National Credit Act Regulation 23A cap. So someone earning R30,000/month with R3,000 of existing debt qualifies for around R7,500/month on a car instalment, which at 12.25% over 60 months finances roughly R335,000. Use the affordability calculator above for your exact number.

Should I take a balloon payment on my car finance?

Only if you have a clear plan for the lump sum at the end of the term. A balloon defers part of the principal (usually 30–40%) to a single payment due at month 60 or 72, lowering your monthly by 20–30% — but you still pay interest on the balloon balance every single month, AND you owe that lump sum at the end. Most balloon buyers cannot pay cash and end up refinancing, which adds 12–36 more months of interest and extends the loan past the car's useful life. Worse: if the car's market value at month 60 is less than the balloon (very common on heavily depreciated SUVs and bakkies), you cover the gap from your pocket. Use a balloon only if you'll genuinely save the monthly difference and have the cash ready at term end.

How much deposit do I need for vehicle finance?

SA banks routinely offer 0% deposit vehicle finance to qualifying buyers, but a 10% deposit gets you a noticeably better interest rate — usually 0.5% lower over the life of the loan. A 20% deposit is the sweet spot: best rates, lower monthly, and you avoid being underwater on the loan in the early years. Trade-in value works exactly like a deposit. Don't forget the once-off NCA initiation fee (R1,207.50 incl VAT, capped by Regulation 42), the monthly admin / service fee (~R69/mo), and comprehensive car insurance (typically R800–R2,200/month, mandatory for any financed vehicle in SA).

What's the typical loan term for SA vehicle finance?

Standard SA vehicle finance terms are 24, 36, 48, 54, 60, 66 and 72 months. 60 months is the SA mid-point — long enough to keep monthlies manageable on a R300k+ vehicle, short enough that you'll exit the loan before the car needs major mechanical work. 84 months is available at a few lenders (Capitec, dealer finance) for new vehicles only, but extending that long means you'll be underwater on the loan — owing more than the car is worth — for most of the term, which is risky if you crash, want to sell early, or trade up. Our calculator caps at 72 months for this reason.