Car depreciation: rates in Saudi Arabia and Egypt, with examples
How to depreciate a car: straight-line and declining balance with SAR and EGP examples, Saudi and Egyptian tax rates, and the effect on cost per km.
Reviewed 8 min read
What a long-term lease usually includes
Long-term business leases (usually 2–4 years) bundle into one monthly payment most of what you'd pay yourself when buying. But what's covered differs between contracts, so read every clause:
| Item | Usually included? |
|---|---|
| Use of the car | Yes |
| Insurance | Often comprehensive; check the excess |
| Scheduled service | Usually |
| Tyres and battery | Sometimes, or up to a limit |
| Registration and annual fees | Varies by contract: ask explicitly |
| Replacement car | In some contracts |
| Fuel and fines | No, always on you |
| Extra km | No, charged per km over the limit |
Worked example: one car for 3 years
The figures below are illustrative for a mid-size sedan in Saudi Arabia doing 40,000 km a year (120,000 km over 3 years). Replace them with your real numbers and quotes. Fuel is left out because it's the same either way.
| Item | Amount (SAR) |
|---|---|
| Car price | 90,000 |
| Financing cost over 3 years (example) | 9,000 |
| Comprehensive insurance (3,500 × 3) | 10,500 |
| Service, tyres, battery (3 years) | 7,500 |
| Annual fees and inspection (3 years) | 1,000 |
| Less: expected resale after 3 years | −50,000 |
| Net cost | 68,000 |
| Per month | ≈ 1,889 |
| Per km | ≈ 0.57 |
| Item | Amount (SAR) |
|---|---|
| Monthly payment incl. insurance and service (example) × 36 | 2,000 × 36 = 72,000 |
| Extra-km charges (if the limit is 40,000/year) | 0 |
| Return damage charges (allowance) | 1,000 |
| Net cost | 73,000 |
| Per month | ≈ 2,028 |
| Per km | ≈ 0.61 |
In this example buying is about SAR 5,000 cheaper over 3 years. But three things can easily flip the result:
- Resale price: sell it for 40,000 instead of 50,000 and the lease becomes about SAR 5,000 cheaper. Resale is the least certain number in buying.
- Tied-up cash: buying means a down payment or the full price on day one. That money could have been working in your business.
- Kilometres: if you drive 60,000 km a year and the contract allows 40,000, extra-km charges can swing the comparison clearly towards buying.
And in Egypt?
Same logic, with two big differences. First: car prices in EGP move hard with the exchange rate, so a used car may sell years later for close to, or more than, what you paid in EGP, which favours buying when you have the cash. Second: EGP financing is usually expensive at current interest rates, so buying on instalments can end up dearer than leasing. Compare the reducing (effective) rate in the bank's offer, not the advertised flat rate. Run both options with real quotes, the same km and the same term.
Read next: Car loan calculator
When each option wins
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Many companies mix: they buy the core cars that work daily for years, and lease extra cars for a project or a season.
Read next: Car depreciation: how to work it out · Rental fleet maintenance tracking
Questions to ask before signing a lease
- How many km a year are allowed, and what's the extra-km rate?
- What's the insurance excess, and who pays it after an accident?
- Are tyres, battery and a replacement car included?
- What's the early-termination fee?
- How is damage assessed at return? Ask for written standards and take photos at pickup.
- Who handles renewal and inspection, and who pays fines?
Bought or leased: track the real cost
Either way, the question that matters is: what does each car cost per km this month? In Sayarti+ Business, log the instalment or lease payment as a monthly expense on the car, with fuel, service and fines, and you see the monthly cost per car and per driver, and keep an eye on km so you don't overshoot the contract limit.
FAQ
Is leasing cheaper than buying for a company?
Not always. Buying usually wins with long ownership and high km; leasing suits those who want a fixed payment and free cash. Work out cost per km for both.
How long is a long-term lease?
Usually 2–4 years; some contracts run one year.
Is insurance included in the lease payment?
In most contracts yes, but check the excess and who pays it.
What if I go over the km limit?
You pay a set rate per extra km at the end of the contract or yearly. Estimate your km before you sign.
Can we mix buying and leasing?
Yes, and it's common: core cars owned, extra cars leased for projects and seasons.
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
