Car: cash, finance, a balloon or a lease - if you sell after a few years, which cost you least?

The same car four ways: what you pay on day 0, every instalment and fee, the interest your money could have earned, less what the car is worth (after settling the loan) when you sell - at current South African rates.

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Example data - to be completed. These numbers belong to a sample household. Move the sliders to your own figures →

Cash costs least if you sell after 5 years

A R 458 400 car sold after 5 years, net cost: cash R 403 219, finance R 506 277, balloon R 521 318, lease R 626 082.

Cash, sold after 5 years
R 403 219
Cheapest. Paid + lost interest - equity
Bank finance, sold after 5 years
R 506 277
Paid + lost interest - equity
Balloon, sold after 5 years
R 521 318
Paid + lost interest - equity
Lease, sold after 5 years
R 626 082
Deposit and payments - no equity

What this means

  • Cash costs least if you sell after 5 years - R 222 863 less than lease.
  • Day 0: R 458 400 for cash, R 47 048 (deposit and fees) for bank finance or a balloon, R 25 000 lease deposit (non-refundable).
  • With the balloon you owe more than the car is worth from month 11 to month 32 - selling then costs you cash on top.
  • Figures are calculations, not advice - no bank, dealer or lease company is recommended.

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Assumptions

  • A R 458 400 car, sold after 5 years (term 72 months); finance and balloon with 10% down (R 45 840).
  • Day 0 is the cash you pay out: R 458 400 for cash, R 47 048 (deposit + the R1 207.50 initiation fee) for finance and balloon, nothing for the lease.
  • Finance at 12.75%: R 8 227 a month. Balloon of 30% (R 137 520 in the last month): R 6 946 a month. Both add the R69 a month service fee.
  • Lease: R 8 250 a month. You never own the car, so there is no equity - its net cost is the payments and their lost interest.
  • Every rand paid out could have earned 7% a year - counted the same way for all four options.
  • The car loses 18% in year 1 and 10% a year after - worth about R 246 620 when you sell.
  • Selling before the term ends settles the loan from the sale; no early-settlement penalty is assumed. Rand as spent.
  • Services, maintenance, insurance and tyres are excluded because they apply to every option. Bank leases usually exclude insurance; if your lease bundles maintenance or insurance, it is better than shown by roughly what those would cost you.

Where the typical figures come from

  • Interest rate (Low 10.75%, Moderate 12.75%, High 15.25%): prime is 10.75% since the Reserve Bank raised the repo rate to 7.25% in September 2026; Low is prime (a good-credit deal), Moderate is prime + 2 (ClearScore's typical vehicle-finance rate), High is about what TopAuto reports for average credit (up to ~15.3%). Banks price each buyer on their credit record. Briefly, SARB repo 7.25%; ClearScore; TopAuto.
  • Balloon (Low 20%, Moderate 30%, High 35% - the slider stops at 35%): most banks cap a balloon at 40% of the price; cars.co.za's worked example uses 35%; WesBank reported an average balloon of 37% on the 35% of new deals that had one (August 2025). cars.co.za, June 2026; FAnews / Standard Bank.
  • Term (72 months): WesBank's average new-car contract runs past 73 months; 84 months is offered. NADA.
  • Interest your money could earn (Low 7% - the starting figure, Moderate 8.75%, High 9.75%): GoTyme Bank's 12-month fixed deposit (8.75%) and 36-month (9.75%), July 2026; Low is our estimate for a money-market fund after the September hike. GoTyme Bank.
  • Fees: the National Credit Act caps the initiation fee on a vehicle loan at R1 207.50 and the service fee at R69 a month (VAT included) - check your quote. TimesLIVE.
  • Car prices: VW Polo Vivo 1.4 Life R271 900, Toyota Corolla Cross 1.8 XS R458 400, Toyota Hilux 2.8 GD-6 SRX double cab auto R658 500 (cars.co.za / TopAuto, 2026 - the same cars as the EV calculator); BMW X3 20 R1 047 760. cars.co.za, BMW X3.
  • Resale value: a new car typically loses 15-20% in its first year (getWorth, via TimesLIVE); Toyotas and bakkies hold value better. TimesLIVE, 2024.
  • Estimates, not sourced: each preset's lease payment (about 1.8% of the price a month, scaled from Toyota Kinto's Corolla Cross subscription), each car's yearly loss in value, and the Low savings rate. Get a real lease quote - some include insurance and maintenance, some do not.

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