Buying a car in Saudi Arabia has become easier than ever, thanks to the availability of flexible financing solutions from banks and dealerships. However, understanding car loan interest rates in Saudi Arabia is essential if you want to save money and choose the best deal. This detailed guide breaks down the latest rates, how they work, what affects them, and how you can secure the lowest rate possible.

Recommend: Urgent Online Finance for Non-Saudis in KSA

---

What Are Car Loan Interest Rates in Saudi Arabia?

Car loan interest rates in Saudi Arabia refer to the percentage charged by banks or finance companies when you borrow money to purchase a vehicle. These rates vary depending on:

• Your salary

• Your credit score

• The bank or finance provider

• Whether the car is new or used

• Loan duration

• Down payment amount

In 2025, Saudi Arabia’s auto finance market remains competitive, giving buyers excellent opportunities to secure low-rate financing.

---

Current Car Loan Interest Rates in Saudi Arabia 

While exact numbers vary by bank and customer profile, here’s the general range offered by top banks:

Average Car Loan Interest Rate Ranges

• New cars: 2.49%–4.99% per year

• Used cars: 3.5%–7.5% per year

• Dealer financing/in-house finance: 0%–5% (depending on promotions)

Popular Banks & Their Car Finance Rates

(Approximate ranges—depends on profile)

---

How Car Loan Interest Rates Are Calculated

Saudi banks use different financing methods, mainly:

Recommend: Emirates NBD Car Loan UAE: Complete Guide to Rates, Eligibility & Benefits

1. Murabaha (Islamic Financing)

The bank buys the car and sells it to you at a marked-up price.

2. Flat Rate vs. Reducing Balance

• Flat Rate: Interest is calculated on the full loan amount.

• Reducing Balance: Interest decreases as you repay the loan, making it more cost-effective.

Tip: Ask the bank if the rate is flat or reducing, as this affects the total repayment significantly.

---

 Car Loan Interest Rates in Saudi Arabia

1. Salary and Employment Stability

Higher salary = lower risk = better rates.

2. Credit Score (SIMAH)

Banks in Saudi Arabia use SIMAH to check your credit score.

3. Car Type: New vs. Used

• New cars: Lower interest, fewer risks

• Used cars: Higher interest, limited loan terms

4. Loan Tenure

Shorter tenure = lower overall interest
Longer tenure = higher total repayment

5. Down Payment

Paying 10%–20% upfront reduces your total cost.

---

How to Get the Lowest Car Loan 

1. Improve Your SIMAH Credit Score

• Pay bills on time

• Avoid late credit card payments

• Clear outstanding loans

2. Choose a Shorter Loan Tenure

Opt for 24–36 months if affordable.

Recommend: Buy Cheapest and Installment Car Insurance in Saudi Arabia

3. Compare All Bank Offers

Never take the first offer. Always compare 4–5 banks.

4. Look for Dealer Promotions

Toyota, Hyundai, Kia, and Nissan often offer 0% interest or no down payment.

5. Transfer Your Salary

Banks offer lower interest rates for customers with salary transfers.

---

Car Loan Calculator Example (Saudi Arabia)

Let’s assume:

• Car price: SAR 100,000

• Down payment: 10% = SAR 10,000

• Loan amount: SAR 90,000

• Interest rate: 3% flat

• Tenure: 3 years (36 months)

Monthly Installment Example

Approx. SAR 2,700–2,900 per month (depending on provider).

---

Documents Required to Apply 

For Salary Transfer Customers

• National ID / Iqama

• Employment letter

• Bank statement (last 3 months)

• Salary certificate

For Non-Salary Transfer Customers

• Valid ID / Iqama

• Bank statements (3–6 months)

• Proof of income

  Recommend: How To Buy B Care Car Insurance Online In Saudi Arabia Full Guide

• Car quotation from the showroom

For Expats in Saudi Arabia

• Iqama

• Passport

• Salary certificate

• Employment contract

• Bank statement

---

Best Banks for Low Car Loan 

1. Al Rajhi Bank Car Finance

• Sharia-compliant

• Fast approval

• Competitive rates for new cars

2. SNB Car Finance

• One of the lowest interest rate ranges

• Cashback offers during promotions

3. Riyad Bank Auto Finance

• Flexible tenure

• Finance available for used cars

---

Car Loan Interest Rates for Expats  

Expats often get slightly higher rates due to risk assessment.
Average ranges:

• New Cars: 3.2% – 5.5%

• Used Cars: 4%–8%

To get lower rates, expats should ensure the following:
✔ Strong SIMAH score
✔ Stable employment
✔ Salary transfer

Recommend: Top 10 Reasons Why Living in Saudi Arabia and Life in Saudi Arabia as an Expat

---

Car Loan Alternatives in Saudi Arabia

1. Lease-to-Own (Tasjeel / Ijarah)

• Monthly rental

• Own the car after the final payment

• Available from many finance companies

2. Personal Loans

Some buyers prefer personal loans to avoid car-specific contracts.
Rates are usually higher but offer flexibility.

---

FAQ: Car Loan Interest Rates in Saudi Arabia

a. What is the average car loan interest rate in Saudi Arabia?

The average rate ranges from 2.49% to 5% for new cars and 3.5% to 7.5% for used cars, depending on the bank and your credit profile.

b. Are car loan interest rates in Saudi Arabia Islamic (Sharia-compliant)?

Most banks offer Murabaha or Ijarah financing, which follows Sharia principles—no traditional interest, only profit margin.

c. Can expats get a car loan in Saudi Arabia?

Yes. Almost all major banks offer auto financing to expats with stable employment and a valid Iqama.

d. Does a credit score affect car loan approval?

Yes. Banks use SIMAH scores to evaluate risk. A higher score increases your chance of approval and lowers your rate.

e. Is 0% interest car financing available in Saudi Arabia?

Yes. Many dealers—especially Toyota, Lexus, and Hyundai—offer 0% financing promotions, especially during Ramadan, Eid, and end-of-year sales.

6. What is better: flat rate or reducing rate?

Reducing the rate is more cost-effective. A flat rate is simpler but usually results in a higher total repayment.

---

Conclusion:

Understanding car loan interest rates in Saudi Arabia helps you save thousands of riyals. Always compare banks, maintain a good credit score, and check for seasonal promotions. With smart planning, you can drive your dream car at the lowest possible cost.