Car finance in the UAE: down payment and flat rate made simple

Most UAE banks use a flat rate for car finance, meaning interest is calculated on the full finance amount for the whole term.

Down payment

Under UAE Central Bank rules, the maximum car finance is 80% of its value, so the minimum down payment is 20%.

How is the payment calculated?

Payment = (Finance amount + finance amount × rate × number of years) ÷ the number of months. Use the loan calculator on our site to try different scenarios.

Finance term and salary limit

The maximum car finance term in the UAE is 60 months (5 years). Your total monthly installments must not exceed 50% of your salary, and most banks require a minimum salary of AED 5,000.

Worked example

A car priced at AED 100,000 with a 20% down payment (AED 20,000), at 2.99% over 5 years: profit is = 80,000 × 2.99% × 5 = 11,960 AED, and the monthly payment is ≈ (80,000 + 11,960) ÷ 60 = 1,533 AED.

Flat vs reducing-balance rate

A 2.99% flat rate is roughly 5.6% on a reducing-balance basis (APR), so always compare the same type of rate between banks, and ask about the processing fee (usually about 1% of the finance amount) and early settlement fees.