0% car finance or the cash discount?
Updated
"0% for 5 years" at SAR 100,000 or SAR 8,000 off for cash? With SAR 20,000 down, the 0% offer costs an APR of 4.58% measured against the cash price of SAR 92,000, admin fee and VAT included — not 0%.
Instalments on this page follow the standard monthly formula on the reducing balance. Your bank counts interest or profit day by day between the actual payment dates and rounds each amount, so its own schedule can differ slightly. Only your signed offer is binding.
Not a valid document. Estimate for information only — not financial advice, not an offer of credit and not a bank document. Errors are possible. Only your bank's or finance company's official offer letter, contract and statements are binding.
How the hidden rate is found
With 0% finance you repay the full offer price in equal instalments. Paying cash would have cost less. The calculator finds the yearly rate — SAMA's way, counted in years — at which receiving only the cash price would give exactly the same payments, fee and VAT included. That is what the "0%" really costs. If the offer price equals the cash price, only the admin fee makes it cost anything.
The rules
- APR in every advert: adverts must show the APR and may not show other rates on their own; the APR includes every fee you cannot avoid.
- At most 60 months; admin fee at most 0.5% or SAR 2,500, whichever is lower, plus VAT.
Questions people ask
Is 0% car finance really free?
In Saudi Arabia, only if the 0% price equals the cash price and there is no fee. If you give up a cash discount, the discount is the term cost.
Can an advert say 0%?
In Saudi Arabia, adverts must show the APR, which includes every fee you cannot avoid; a fee or a higher price than cash makes the APR more than 0%.