How to use the Car Financing Calculator
- 1 Enter the car price, the on-road price from the dealer.
- 2 Enter your down payment as a percentage.
- 3 Enter the markup rate, which is KIBOR plus the bank's spread.
- 4 Choose the tenure and enter insurance as a percentage of price a year.
Worked example
A Rs 4,500,000 car with 30% down, a 14% markup rate over 5 years and 2% insurance. The down payment is Rs 1,350,000 and Rs 3,150,000 is financed. The monthly installment is about Rs 73,295, total markup is Rs 1,247,699 and, with insurance, the car costs about Rs 6,197,699 in total.
Features
Installment and markup
Monthly installment, total markup and total cost in one place.
Insurance included
Adds yearly insurance, which banks require on financed cars.
Bank and ijarah
Works for conventional auto loans and ijarah rentals priced on KIBOR.
When to use it
Comparing banks
Compare Meezan, HBL, Bank Alfalah and other quotes on the same terms.
Down payment choice
See how a bigger down payment lowers the installment.
Tenure choice
Compare 3-year and 5-year plans.
Cash or finance
See how much extra financing costs over paying cash.
Frequently asked questions
What are the SBP limits on car financing?
Under SBP rules, the maximum tenure is 5 years, the minimum down payment is 30% and total auto financing per person is capped at Rs 3 million. Rules can change, so confirm with your bank.
What is KIBOR?
The Karachi Interbank Offered Rate, a benchmark that banks add a spread to. Most car loans use 1-year KIBOR and are reset each year, so installments can change.
Is ijarah different?
In ijarah the bank owns the car and rents it to you, then transfers it at the end. Monthly rentals are usually priced on KIBOR, so the cost is similar.
Are there other charges?
Banks charge processing fees, tracker fees and sometimes early settlement charges. Registration and token tax are paid separately.
Can I settle early?
Yes. Most banks allow early settlement after paying a charge on the remaining principal. Read the terms before signing.
Why is insurance required?
The bank owns or has a charge on the car, so comprehensive insurance is compulsory for the whole tenure, usually around 1.5% to 2.5% of the car value a year.
Is a bigger down payment better?
It lowers the installment and total markup, because you borrow less. Keep enough savings for emergencies before putting extra money down.
Do imported cars get financing?
Banks mainly finance locally assembled cars. Many do not finance used imported cars, or offer them on stricter terms.
Does my salary affect approval?
Yes. Banks usually want total installments to stay within about 40% to 50% of your net monthly income, and check your credit record with the SBP credit bureau.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated