How vehicle finance works in South Africa
Most South Africans buy cars on instalment sale agreements. You pay a deposit, the bank finances the rest, and you pay it back in monthly instalments — typically over 60 to 72 months. The interest rate is usually linked to the prime lending rate.
The balloon trap
A balloon payment defers a chunk of the loan to the end of the term. It lowers your monthly payment, which makes a more expensive car look "affordable." But the balloon is still your debt — and at the end you'll either need cash to settle it, or you'll have to refinance or trade in. Many people get stuck in a perpetual cycle. Only use a balloon if you're disciplined and have a plan.
Frequently asked questions
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