The Role of Deposit Amounts in Car Repayments: What Calculators Show Us

The cost of a car is considerable for most South Africans. Whether you are looking to buy your first car at a reasonable price or to move up to a luxury model, you can save thousands of Rands on your monthly repayments by paying a decent deposit amount. In this blog post, we will discuss how your deposit amount can impact your car repayments and how a car repayments calculator can help you in this decision.

Why Deposits Matter

If you choose to buy a car on a finance offer, the amount of your deposit will help to determine the level of your monthly repayments. If you have a significant deposit, this means you will be financing less, and, your monthly repayments will be reduced. If, on the other hand, you have a lower deposit, you will end up having to borrow more, and therefore your repayments will be higher.

In South Africa, a typical car buyer might pay a deposit of between 10 percent and 20 percent of the purchase price. But what might seem like a small adjustment to your deposit could have a massive effect on your financial obligations through the life of a loan.

Understanding Car Repayments

Your car repayments are determined by a number of factors, such as the interest rate you have been offered, the term of the loan, your deposit, and other factors. As those are set, you can set up a car finance arrangement to fit your budget and your needs. One of your biggest assets for helping you do that can be a car repayments calculator.

R +
months +
% +
?For example service fees and account management fee
?For example opening fees and agreement fees
R 2100.19
60 months
R 26011.17
R 0.00
R 126011.17
9.93 %
Show repayment plan

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*Representative example: Estimated repayments of a loan of R30,000 over 36 months at a maximum interest rate including fees of 27,5% APR would be R1,232.82 per month. Swift Banker is an online loan broker and not a lender. Our service is free, and we work with NCR licensed lenders in South Africa. Interest rates charged by lenders can start as low as 20% APR, including an initiation and service fee determined by the lender. The interest rate offered depends on the applicants' credit score and other factors at the lender's discretion.

Loan amount R100 - R250,000. Repayment terms can range from 3 - 72 months. Minimum APR is 5% and maximum APR is 60%.

Using a Car Repayments Calculator South Africa

A car repayment calculator is very useful for those people who would like to buy car in south Africa. This calculator allows you to enter different deposit amounts, loan terms, and interest rates so you can see how these factors would affect your monthly repayments. You may use the car repayment calculator for the following purposes:

  • Estimate Monthly Repayments: Enter different deposit amounts to see what you would have to pay each month.
  • Compare Financing Options: Select a loan amount, number of payments and the interest rate to compare payment schedules from different lenders.
  • Plan Your Budget: Knowing how much you will probably have to pay each month gives you a much better chance of drawing up a budget you can stick to and afford other expenses.

Practical Example

For example, let’s look at how a deposit affects car repayments. Imagine a car you want to buy costing R300,000. If you make a 10% deposit on that car (i.e., R30,000), you will finance the balance of R270,000 over a 5-year term at a 9% interest rate. This means your monthly repayments will be approximately R5,623.

However, when you put down a 20 percent deposit (which is R60,000), you become responsible only for paying interest on R240,000. Your loan term would still be 20 years, but with the same interest rate, your monthly repayments would match up to around R5,004 a month. That’s a difference of around R619 a month, which on a 20-year term adds up to a saving of well over R100,000.

Wrapping Up

Knowing the implication of deposit figures to your car repayments is the basis of sound financial decision-making. A car repayments calculator allows you to explore different possibilities and settle on a financing plan that suits your needs.

Want to take this further? Try the car repayments calculator from right now to see how increasing your deposit can help.