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The finance term of your car loan

The vehicle finance term is the period of time over which you will pay back the car loan. In South Africa the car finance terms usually range between 12 and 72 months. Obviously the longer your vehicle finance term the smaller your monthly instalments will be but also worth noting is that you will pay more interest on longer car finance terms.

 

Example: Finance terms If you finance a vehicle of R200 000 over a period of 60 months at a 10% interest rate, then your total finance amount will be R254 964.60 or R4249.41 per month.

 

If you finance that same car but over a longer period of 72 months at a 10% interest rate, then your total finance amount will be R266 722.24 or R3705.17 per month.

 

So although longer vehicle finance terms enable you to save on your monthly instalment you will end up paying more and paying for longer. Remember you only own the car once your final monthly payment has been made.