Should you take a car loan or pay cash? Compare total loan cost, interest paid, and the opportunity cost of deploying your cash elsewhere. Pre-filled with African bank rates.
💳 15 Countries💰 Free🏦 African Rates
🚗 Vehicle & Financing Details
Usually 20-30% of vehicle price
Pre-filled for selected country
T-bill / savings rate if you kept the cash
Total Loan Cost
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Monthly: 0
Total Cash Cost
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Cash
Frequently Asked Questions
What are typical car loan rates in Africa?
Car loan rates vary significantly. South Africa has the lowest rates at ~12-15% (prime-linked). Kenya's rates range from 16-22%. Nigeria is typically 22-30% due to high monetary policy rates. Ghana is 28-35%. Egypt is around 20-28%. Uganda and Tanzania are typically 20-25%. These rates make African car loans among the most expensive in the world.
When does a car loan make financial sense in Africa?
A car loan makes sense when: (1) your business generates returns higher than the loan rate, (2) you need the car to generate income, (3) taking the loan preserves working capital for higher-return uses, or (4) you have cash flow but not liquid savings. If you're taking a personal loan at 25% interest and have no investment returning more than that, paying cash is always cheaper.
What is opportunity cost in car buying?
Opportunity cost is what you give up by paying cash. If you pay $15,000 cash for a car, you lose the ability to invest that $15,000 elsewhere. If T-bills yield 12% in Kenya, you forgo $1,800/year in investment returns. Over 3 years, that's $5,400+ in foregone returns. The comparator weighs this against the interest you'd pay on a loan.
Should I make a large down payment on a car loan?
A larger down payment reduces your loan amount and total interest paid. However, if the interest rate is very high (e.g., 30%+), a bigger down payment saves significantly more. If the rate is moderate (12-15%), you might do better keeping some cash invested. Our tool shows the exact impact of different down payment sizes.