“Is it possible to get a new BMW SUV for around R6k a month?” Thats the question I got last week from a lady keen to drive a Bavarian SUV after saving R50 000 for a deposit. When I eventually noted that the entry SUV from BMW, a new X1 sDrive18i SAV starts from R809 000, will require instalments ranging from R12 237.39 per month (10% deposit, 30% residual, prime +2 @ 12.5% and 72 months payment term), she was stunned.
This is normal in today’s high priced new vehicles hence it’s important for potential car buyers to be aware of the instalment range they are likely to pay. In the video below we explain what affects your car instalment so you best understand the analysis we will cover later in this article
To best understand whether you are paying too much instalment for your car, you need to look at what a normal instalment would be for a similarly priced vehicle. As noted on the above video, things like deposit, interest rate, balloon %, term of finance and purchase price play a critical role in determining the monthly instalment you will pay for your prized possession.
To give a best way to assist one get an understanding of whether they are paying too much for their instalment, we have designed an illustrative table below where the price of the car will vary (according to the advertised price) but the following attributes, i.e. interest rate, deposit, residual % (balloon), payment term will stay the same.
| Purchase price of the new vehicle | Deposit @ 10% of the purchase price | *Interest rate charged | Finance Term of vehicle | Balloon % (Residual %) | Instalment to pay per month |
| R200 000 | R20 000 | 12.5% | 72 | 30% | R3095.26 |
| R250 000 | R25 000 | 12.5% | 72 | 30% | R3845.85 |
| R300 000 | R30 000 | 12.5% | 72 | 30% | R4596.43 |
| R350 000 | R35 000 | 12.5% | 72 | 30% | R5347.02 |
| R400 000 | R40 000 | 12.5% | 72 | 30% | R6097.60 |
| R450 000 | R45 000 | 12.5% | 72 | 30% | R6848.19 |
| R500 000 | R50 000 | 12.5% | 72 | 30% | R7598.78 |
| R550 000 | R55 000 | 12.5% | 72 | 30% | R8349.36 |
| R600 000 | R60 000 | 12.5% | 72 | 30% | R9099.95 |
| R650 000 | R65 000 | 12.5% | 72 | 30% | R9850.53 |
| R700 000 | R70 000 | 12.5% | 72 | 30% | R10601.12 |
| R750 000 | R75 000 | 12.5% | 72 | 30% | R11351.70 |
| R800 000 | R80 000 | 12.5% | 72 | 30% | R12102.29 |
| R850 000 | R85 000 | 12.5% | 72 | 30% | R12852.87 |
| R900 000 | R90 000 | 12.5% | 72 | 30% | R13603.46 |
| R950 000 | R95 000 | 12.5% | 72 | 30% | R14354.04 |
| R1 000 000 | R100 000 | 12.5% | 72 | 30% | R15897.08 |
*= Prime + 2% (10.5% +2% = 12.5%)
The table above takes into account the following:
- The purchase price is excluding accessories, dealer charges, discounts (dealer or manufacturer) trade in shortfalls/access.
- Deposit at 10% is what we (at iMoto) consider to be the least amount of money one needs to save for a deposit to a car they “afford”.
- The interest rate is what we (at iMoto) consider to be the norm. This depends on what the banks offers you using your credit status at the time of finance application.
- The maximum term according to the WesBank Vehicle Finance Calculator used at the time of this article, was 72 months.
- The residual %, also known as Balloon %, at 30% is the maximum % allowed by the WesBank Vehicle Finance Calculator at the time of this article.
To calculate your own instalments, you can visit the WesBank Vehicle Finance Calculator by clicking HERE.
You can then insert amounts (purchase, deposit, interest rate, finance term and residual % you are comfortable with. Remember, the Financing bank has control on the Interest rate each deal is approved for. You can negotiate with the Bank but the interest rate is determined by the Bank.