Quick answer: A 100,000 car plus 15% VAT, with 20,000 down and a 10,000 trade-in, leaves 85,000 to finance; at 4.5% over 60 months the payment is 1,584.66 a month and the total interest is 10,079.40.
How it's calculated
Amount financed = price × (1 + tax rate) − down payment − trade-in. In Saudi Arabia VAT is 15% and in the UAE 5%; if the price you were given already includes VAT, set the tax to 0.
The monthly payment uses the standard amortization formula M = P·r ÷ (1 − (1 + r)^−n), with r the annual rate ÷ 12 and n the number of months. A longer term lowers the payment but raises the total interest.
Bank and dealer car finance in the Gulf is often quoted as a flat rate, which looks lower than the same reducing rate. Convert a flat quote with the loan and Murabaha calculator before comparing. Islamic car finance (Murabaha, Ijara) uses a profit rate, and the payment maths is the same.
Worked examples
- 100,000 + 15% VAT, 20,000 down, 10,000 trade-in, 4.5%, 60 months: P = 85,000 → M = 1,584.66
- Same car over 48 months: M = 1,938.30, total interest 8,038.22
Frequently asked questions
Is the trade-in taxed?
This calculator applies the tax to the full price, as Gulf VAT does. In many US states sales tax is charged on the price minus the trade-in; reduce the price by the trade-in tax saving if that applies to you.
Does the payment include insurance and registration?
No. Comprehensive insurance, registration and any admin fee are extra; some lenders let you finance the insurance, which raises the amount financed.
How long can a car loan be?
Most lenders offer 1 to 5 years, some up to 7. In Saudi Arabia, consumer finance repayments are limited to a share of your salary under SAMA rules.
How much should I put down on a car?
As much as you comfortably can while keeping savings. A larger down payment lowers both the payment and the interest, and reduces the chance of owing more than the car is worth.
Is a flat rate the same as the rate here?
No. This calculator uses a reducing rate. Car offers quoted as flat rates cost much more than the same number on a reducing basis, so ask the dealer for the reducing rate.
Should I choose a shorter or a longer term?
A shorter term has a higher payment but costs less interest. A longer term is easier each month but costs more overall, and the car loses value during that time.