Hire purchase, at the flat rate the dealer actually quotes
Malaysian car loans are hire purchase, and hire purchase charges interest on the full amount for the whole term — not on the balance that is left. Enter the car price, your down payment and the flat rate to get the real monthly instalment, what that flat rate is worth as an ordinary interest rate, and what the car costs a month once road tax and insurance are counted. Nothing is uploaded or saved.
- Nothing is uploaded or saved
- Works offline
The car
Running costs
Monthly instalment
RM580.02
A flat rate of 2.9% is about 5.4% on a reducing balance — that is the figure to compare against a personal loan or a mortgage quote, because interest here is charged on the full amount for the whole term rather than on what is left.
Amortisation schedule
| Year | Payment | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | 6,960.24 | 1,174.56 | 5,785.68 | 34,714.32 |
| 2 | 6,960.24 | 1,174.56 | 5,785.68 | 28,928.64 |
| 3 | 6,960.24 | 1,174.56 | 5,785.68 | 23,142.96 |
| 4 | 6,960.24 | 1,174.56 | 5,785.68 | 17,357.28 |
| 5 | 6,960.24 | 1,174.56 | 5,785.68 | 11,571.60 |
| 6 | 6,960.24 | 1,174.56 | 5,785.68 | 5,785.92 |
| 7 | 6,960.06 | 1,174.14 | 5,785.92 | 0.00 |
These figures are an estimate for planning, not a quote and not financial advice. Your lender’s offer letter is the number that counts.
How it works
- 1
Enter the price and what you are putting down
Ten percent is the usual minimum. Set it as a percentage and the ringgit figure follows, or type the ringgit figure and the percentage follows — the amount financed updates underneath either way.
- 2
Use the flat rate, not an ordinary rate
The figure a dealer or bank quotes for a car — 2.9%, 3.4% — is a flat rate. It is charged on the whole amount you borrow, every year, for the whole term, no matter how much you have already repaid. That is why it looks so much cheaper than a personal loan and is not.
- 3
Read the equivalent reducing-balance rate
Underneath the instalment is what that flat rate is actually worth as a normal interest rate. It is roughly double. This is the only number that can be compared with a personal loan, a mortgage, or a 0% instalment plan, and comparing the flat rate directly against those is the mistake this page exists to prevent.
- 4
Add road tax and insurance
The bank collects the instalment and nothing else, but the car still costs you road tax and insurance every year. Enter them annually and they are divided across the months, so the final figure is what leaving the car in your driveway actually costs each month.
Frequently asked questions
What is a flat rate, and why is it not comparable to a normal rate?
On a normal reducing-balance loan, interest is charged each month on what you still owe, so the interest shrinks as you repay. On hire purchase, the total interest is fixed at the start: the amount borrowed multiplied by the rate multiplied by the number of years. You could repay most of the car and still be charged interest as though you had not. A flat 2.9% over seven years works out at roughly 5.4% on a reducing balance — the calculator shows that conversion for whatever you enter.
Is the instalment shown here what the bank will quote?
It should match to the cent for the loan itself, because the hire purchase formula has no room for interpretation: total interest is principal × rate × years, and the instalment is the total divided by the number of months. Differences usually come from a rate that is not what you were told, insurance or accessories folded into the financed amount, or a processing fee added on top.
Why is there no "extra payment" field like the other loan pages?
Because on hire purchase it would be a lie. The interest is already charged on the full amount, so paying extra each month does not reduce it the way it does on a mortgage. Settling early gets you a rebate calculated under the Rule of 78, which front-loads the interest and returns less than most people expect — it is a real thing worth asking your bank about, but it is not the simple saving that an extra-payment field would imply.
What should I put for road tax and insurance?
Road tax in Malaysia is set by engine capacity and by whether you are in the peninsula or in Sabah and Sarawak, so the figure on your renewal notice is the one to use. Insurance is priced on the car’s market value, your no-claim discount and your own details, and the quote you were given is better than any average. Both are entered annually by default and divided across the months.
Does this include the down payment, deposit or booking fee?
The down payment is what you set at the top, and it is subtracted from the price to give the amount financed. A booking fee is usually part of the down payment rather than on top of it. Registration, number plates, tinting and accessories are not included — those vary too much to guess at, and dealers often bundle them differently.
Can I use it for a motorcycle or a used car?
Yes. Hire purchase works the same way for both, and the arithmetic does not care what is being financed. Used cars are usually offered shorter terms and higher flat rates, and motorcycles higher again, so use the rate you were actually quoted rather than a car rate.
Is anything I type here sent anywhere?
No. There is no server behind this site — it is static files on a CDN, and the arithmetic runs in your own browser. This page also saves nothing to your device, so closing the tab clears it.