Monthly car costs: a line-by-line example in SAR and EGP
What does your car really cost each month? Two full examples in SAR and EGP: fuel, oil, tyres, insurance, fees, and the cost people forget: depreciation.
Reviewed 8 min read
What the rate in an offer actually means
Most car finance offers in Saudi Arabia are murabaha: the financier buys the car and sells it to you at a higher price paid in instalments, and the difference is the “profit”. In Egypt it's usually called “interest”. Either way, the big number in the advert is usually a flat yearly rate, and it looks much smaller than it really is.
The difference in one line: a flat rate charges profit on the full amount every year even after you've paid half of it back; a reducing rate charges only on what you still owe. The numbers, and a converter between the two, are on the car loan calculator page.
APR: the number to compare
The annual percentage rate (APR) is the true yearly cost of the finance, calculated on a reducing basis and including admin fees. In Saudi Arabia, the central bank (SAMA) issued rules in 2023 that standardise how this rate is calculated for consumer finance, and they apply to every finance provider in retail lending: the rate is worked out with SAMA's method and calculator in advertising, at the offer stage, in the finance contract and in periodic statements. So ask for the APR in writing in the offer before comparing anything.
In Egypt, ask the bank or company for the “equivalent reducing rate” or effective yearly rate, and ask for the full repayment schedule. If you're only given the flat rate, convert it yourself in the calculator.
Example: three offers for the same car
A SAR 120,000 car, SAR 12,000 down, SAR 108,000 financed over 60 months. In all three, comprehensive insurance is not in the payment (you pay it yearly), so the comparison is fair. The numbers are examples, not real offers.
| Offer A | Offer B | Offer C | |
|---|---|---|---|
| Headline rate | flat | 2.9% ثابتة / flat + دفعة أخيرة 30% / 30% balloon | reducing |
| Admin fee | 1,080 | 1,000 | 0 |
| Monthly payment | 2,115 | 1,461 | 2,113 |
| Balloon (month 60) | 0 | 36,000 | 0 |
| Total after the down payment | 127,980 | 124,660 | 126,789 |
| Approx. APR | ≈ 7.0% | ≈ 4.5% | 6.5% |
A: profit = 108,000 × 3.5% × 5 = 18,900; payment = 126,900 ÷ 60. B: profit = 108,000 × 2.9% × 5 = 15,660; payment = (108,000 + 15,660 − 36,000) ÷ 60. C: reducing payment at 6.5% a year. APR worked out from the net amount after fees against the payments and balloon.
What the example shows
- Offer A advertises just 3.5%, yet costs more than Offer C at 6.5%, because A is flat and has a fee.
- Offer B is cheapest overall with the lowest payment, but only if you'll have SAR 36,000 in five years, or refinance it at a rate nobody knows today, or sell the car.
- The lowest payment isn't necessarily the cheapest offer. Compare APR and total together.
Seven questions before you sign
- What's the APR? Get it in writing.
- Is the rate flat or reducing?
- What's the admin fee, and is it paid upfront or added to the finance?
- Is there a balloon? What are the options when it falls due?
- Is comprehensive insurance in the payment or paid by you? How much, and who picks the insurer?
- What does early or partial settlement cost?
- Is a salary transfer required? What happens if a payment is late?
Tip: A bigger down payment cuts the financed amount and so all the profit on it. If you have spare cash, weigh paying it upfront against keeping it for emergencies and running costs.
In Egypt: flat interest and how to compare it
Many car instalment offers in Egypt state the interest as flat over the loan years. Example: EGP 400,000 financed over 36 months at 15% flat: interest = 400,000 × 15% × 3 = 180,000; payment = 580,000 ÷ 36 ≈ EGP 16,111 a month. That's roughly 26% on a reducing basis. So “15%” here costs more than, say, a 22% reducing bank loan. The numbers are an illustration, not market rates; ask the bank for the full repayment schedule and work out the reducing rate from it.
- Ask about admin fees, car insurance and life insurance if required, and add them to the total.
- The required down payment varies a lot between new and used cars and between lenders.
- Work out the payment together with fuel or gas and service, not on its own.
After signing: track the payments left
Sayarti+ has a free car financing section: enter the monthly payment, the amount still owed and the due day, and it shows how many payments are left, when the car will be yours, and whether this month's payment is done, with a reminder three days before. Each payment is logged as a car expense, so it counts in your cost per km and reports.
Sayarti+ doesn't offer finance or recommend any lender.
FAQ
How is the profit on car finance calculated?
On a flat rate: profit = amount financed × rate × years. To compare, use the APR, which charges only on what's owed and includes fees.
What's the difference between flat and reducing rates?
Flat is charged on the full amount for the whole term, reducing on what's left. At the same headline number, flat always costs more.
What is APR?
The true yearly cost of finance on a reducing basis, including fees. In Saudi Arabia it must be stated in the offer, so ask for it in writing.
Does a balloon payment save money?
It lowers the monthly payment and may lower the total, but it's a big sum due at the end. Only choose it with a clear plan to pay it.
Is car-loan interest in Egypt flat or reducing?
Many offers state it flat. Ask for the reducing equivalent and the schedule, or convert it in the loan calculator before comparing.
Sources
Sayarti+ is an independent app, not affiliated with any government entity. This guide is general information; the binding procedure and fees are on the official portal. It is not financial or tax advice.
We write practical guides on car costs, maintenance and company cars. Every number has a source.
From Sayarti+ — sayartiplus.com · Not affiliated with any government entity
