Car finance rates: flat vs reducing, and how to compare offers
Why 3.5% flat can cost more than 6.5% reducing: read a car finance offer by its APR, fees, balloon and insurance, and compare three offers with an example.
Reviewed 8 min read
Why your car seems cheaper than it is
Most people know two numbers: fuel and the loan payment. The rest comes in irregular chunks: insurance once a year, tyres every three or four years, a battery every two, an oil change every few months. These costs vanish in the months you don't pay them, but they add up. The right way is to spread each cost over the months or kilometres it covers, so you know each month's share.
Monthly share = item cost ÷ months it covers
or
= item cost ÷ km it covers × km per month
or
= item cost ÷ km it covers × km per month
Full example: a sedan in Saudi Arabia
A mid-size family sedan driving 1,500 km a month (50 km a day), using 8 L/100 km, on 95 petrol. Every price here is an example to show the method; put in your own numbers.
| Item | Working | SAR |
|---|---|---|
| Fuel | 1,500 km × 8 ÷ 100 = 120 L × SAR 2.33 (95 petrol, October 2026) | 280 |
| Oil change | SAR 150 every 5,000 km → 150 × 1,500 ÷ 5,000 | 45 |
| Tyres | SAR 1,600 for four every 40,000 km | 60 |
| Battery | SAR 400 every 24 months | 17 |
| Other service | estimate SAR 720 a year | 60 |
| Comprehensive insurance | SAR 2,400 a year ÷ 12 | 200 |
| Registration and inspection | estimate SAR 200 a year ÷ 12 | 17 |
| Washing | 4 × SAR 20 | 80 |
| Total before loan | ≈ 760 | |
| Cost per km | ≈ 0.51 |
Examples to show the method, not market prices. Fuel at the October 2026 price of 95 from Saudi Aramco; oil, tyres, battery, insurance and fees are illustrative assumptions that vary a lot by car, city and driver, so use your own. Today's fuel price is in the box alongside.
Full example: a sedan in Egypt
Same car, same distance (1,500 km a month), 8 L/100 km, on 92 petrol. Prices are examples.
| Item | Working | EGP |
|---|---|---|
| Fuel | 120 L × EGP 19.25 (example, not today's price) | 2,310 |
| Oil change | EGP 1,500 every 5,000 km | 450 |
| Tyres | EGP 12,000 for four every 40,000 km | 450 |
| Battery | EGP 4,000 every 24 months | 167 |
| Other service | estimate EGP 6,000 a year | 500 |
| Comprehensive insurance | estimate EGP 24,000 a year | 2,000 |
| Licence and compulsory insurance | estimate EGP 3,000 a year | 250 |
| Washing | 4 × EGP 100 | 400 |
| Parking | estimate | 300 |
| Total before loan | ≈ 6,830 | |
| Cost per km | ≈ 4.55 |
Examples to show the method; the fuel price is an example, not today's. Comprehensive insurance is usually priced as a share of the car's value, and licence fees depend on engine size and licence term; the full amount is shown at payment on Digital Egypt (digital.gov.eg). Today's fuel price is in the box alongside.
Tip: In Egypt, converting to natural gas changes the fuel line completely for high-mileage drivers. Work it out with your numbers. Work it out
The cost everyone forgets: depreciation
A car loses part of its value every year. You don't pay it in cash, but you lose it the day you sell. In Saudi Arabia, if you buy a car for SAR 90,000 and sell it after three years for SAR 58,500, you've lost SAR 31,500, about SAR 875 a month: more than everything in the table above. We assumed a 35% loss over three years for illustration only; the real rate varies a lot by model and demand, so use your car's number from sale listings.
In Egypt the picture is different: as new-car prices rose in recent years, some used cars held or even gained value in pounds. Still, measure the loss against what the same money could buy, not the number alone.
Read next: Car depreciation: rates and how to work it out
Where does the loan payment fit?
If the car is financed, add the monthly payment to the total: it's money leaving your pocket every month. But part of it buys the car itself and the rest is the lender's profit. To see how much of the payment is a real cost, compare the profit rate the right way.
Read next: Car finance rates explained · Car loan calculator
Five ways to cut your monthly car costs
- Fuel is the biggest line: smooth driving and the right tyre pressure save a few percent for free.
- Compare insurance quotes every year before renewing; don't auto-renew.
- Servicing on time costs less than repairs after a breakdown.
- Buy tyres and a battery before you're forced to, so you can compare prices calmly.
- Log every cost for a full month: many people find a line they never noticed (washing, parking, fines).
Let the app add it up for your car
Instead of tables, log every fill-up, service and expense (insurance, registration, washing, parking, fines) in Sayarti+ in seconds. The app shows this month's spend and your cost per km on the home screen, a monthly and yearly report by category, and a car financing section that shows how many payments are left. All free, and it works offline.
Read next: Car ownership cost calculator
FAQ
What are average monthly car costs?
It depends on distance and car. In our sedan example at 1,500 km a month: about SAR 760 in Saudi Arabia and EGP 6,800 in Egypt, before the loan and depreciation.
What's the biggest car cost?
In cash, usually fuel, then insurance. If you count depreciation, it can be the biggest in the first years.
How do I work out my car's monthly costs?
Add fuel, spread each irregular cost (insurance, licence, tyres, battery, oil) over the months or km it covers, then add washing, parking and the loan.
What's a reasonable cost per km for a personal car?
In our examples about SAR 0.5 or EGP 4.5 per km before the loan and depreciation. Yours may differ a lot, so work it out from your log.
Should fines count as car costs?
Yes: it's money spent because of the car. Log them separately so you see what they cost and catch any discount deadline.
Sources
- Saudi Aramco: Fuel prices, October 2026; gasoline 95 SAR 2.33 per litre — checked 28 October 2026
- Digital Egypt: traffic services, where car licence fees are shown at payment — checked 28 October 2026
- Sayarti+ default settings: oil every 5,000 km, tyres every 40,000 km, battery every 24 months — checked 28 October 2026
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
