Automotive Tips & Advice

Buying a car is one of the most exciting things to do. For some, we might only get to own on average about 5 cars in our lifetime, but for others, buying a new car happens on a more regular basis. How long you take to pay them off is based on a few factors.

If you are buying a car for the first time and applying for finance, your repayment terms will be decided on by the bank. Once they have structured the offer, they will present it to you with all the terms and conditions.

As fun as buying a car is, the flip side is that you are essentially signing a short-term deal with a financial institution and are tied in until the debt is paid in full.

How long will it take me to pay off my car? | Auto Mart

How long it takes to pay the debt back depends on a number of factors:

  • Do you have a deposit?
  • How much is the deposit?
  • Are you taking a balloon payment?
  • What is your monthly affordability?
  • What are your credit score and rating like?

Once all these factors are considered, your loan term will be structured.

The average car loan term in South Africa is between five and seven years but you can pay a car off in as little as a year. Some banks will even offer loans of up to nine years.

How long will it take me to pay off my car? | Auto Mart

By way of a simple example: If a buyer wanted to buy a car that cost R200K and has a 10% deposit to put down with 10% interest charged, his monthly affordability would need to be the following:

  • To pay the car off in one year = R16 500pm (interest paid 10K)
  • To pay the car off in two years = R8 430pm (interest paid 19K)
  • To pay the car off in three years = R5 916pm (interest paid 29K)
  • To pay the car off in four years = R4 664pm (interest paid 39K)
  • To pay the car off in five years = R4 249pm (interest paid 44K)
  • To pay the car off in six years = R3 919pm (interest paid 49K)
  • To pay the car off in seven years = R3 426pm (interest paid 60K)
  • To pay the car off in eight years = R3 077pm (interest paid 71K)
  • To pay the car off in nine years = R2 818pm (interest paid 82K)

The longer the period of the loan, the more you end up paying in interest. So, don't always think that because your monthly fees are low that you are getting a good deal.

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