Your Complete Guide to Car Installment in Saudi Arabia

Choosing a car installment in Saudi Arabia has become a popular financing solution for a wide range of individuals across the Kingdom. With rising car prices and increasing living expenses, owning a car is no longer a luxury, it’s a daily necessity, whether for commuting to work or managing family obligations.

Although car installment options are widely available and offered by various entities, many people still lack a clear understanding of the process, including the conditions, differences between financing models, or even the possibility of getting a car without involving a bank.

In this article, we present a practical and clear guide explaining how car installment in Saudi Arabia works, outlining the main requirements, and comparing financial leasing with traditional ownership installment plans. We also highlight key points to consider before making your decision, so you can proceed with confidence and choose the right plan for your needs.

How to Buy a Car on Installment in Saudi Arabia

If you’re thinking about getting a car through installment in Saudi Arabia, here are the basic steps to follow:

1. Define Your Needs and Budget

Start by identifying the type of car you need, compact, family-size, or performance-oriented. Then determine how much you can afford to pay monthly without straining your other financial commitments.

2. Choose the Right Financing Source

You can get a car installment in Saudi Arabia through various channels:

• Banks: Such as Al Rajhi or Al Ahli, offering flexible financing programs.
• Financing companies: Like Toyota Finance or Abdul Latif Jameel.
• Dealerships: Some dealerships provide direct installment plans without involving banks.

3. Understand the Requirements

To qualify for a car installment, you typically need:

• Proof of income: Such as a salary certificate or recent bank statements.
• Valid ID: National ID for citizens or a valid residency (Iqama) for expats.
• Employment duration: Some providers require 3 to 6 months of continuous employment.

4. Select and Inspect the Car

If you’re buying a used car, inspect it carefully. Check the vehicle’s technical condition, bodywork, and obtain a full service history if available.

5. Review Financial Terms and Offers

Before signing anything, check:

• Down payment: Usually 10%–20% of the car’s value.
• Installment period: Choose a duration that fits your monthly budget.
• Interest rate and fees: Make sure you understand all additional charges.

6. Sign the Contract

Once you’re satisfied with the offer and terms, go ahead and sign the contract. Read every clause, especially regarding payment terms, loan duration, and penalties.

7. Receive the Car

After finalizing the paperwork, you can collect your car. Be sure you receive all legal documents such as registration and ownership transfer.

What Are the Requirements for Car Installment?

The key requirements for getting a car installment in Saudi Arabia include:

1. A valid national ID for citizens or residency permit and passport for expats.
2. Proof of income, such as bank statements (last 3 months) or a salary certificate.
3. A minimum monthly salary of SAR 3,000 to 4,000, depending on the provider.
4. Employment proof: 3–6 months of continuous service in the same job.
5. A clean credit history checked through SIMAH (credit bureau).
6. A down payment of 10% to 20%, although some companies offer 0% down deals.
7. Awareness of the interest rate and administrative fees applied by the financer.
8. The car should be in good condition, typically no older than 5–7 years.
9. Some cases require a salary transfer letter or a guarantor.
10. Comprehensive insurance might be mandatory throughout the financing period.

What Is Direct Car Installment?

One of the most common types of car installment in Saudi Arabia is the direct installment plan, especially popular at car dealerships.

This type of financing allows you to pay the car’s price in monthly installments directly to the dealership, without involving a bank.

Advantages:

• Fast and simple process.
• No need to transfer salary or submit extensive paperwork.
• Flexible payment terms negotiated directly with the dealer.
• Easier communication if issues arise.

Disadvantages:

• Often higher total cost compared to bank financing.
• Additional fees may apply.
• Limited car models or options compared to other financing methods.

What’s the Difference Between Financing and Leasing?

When choosing car installment, you’ll usually come across two main options:

Financing (Ownership Installment)

You pay monthly installments until the full car price is covered. Once completed, the car becomes fully yours.

Pros:

• You own the car at the end.
• Flexible repayment terms.

Cons:

• Higher monthly payments.
• May require salary transfer or additional documentation.

Leasing (Installment Lease)

You rent the car for a fixed period and can choose to buy it at the end by paying a balloon (final) payment.

Pros:

• Lower monthly payments.
• Option to switch to another vehicle after the contract ends.

Cons:

• You don’t own the car unless you pay the final lump sum.
• Possible extra charges for maintenance or usage.

Which One Is Best?
If you want full ownership, financing is better. If you prefer flexibility and lower monthly costs, leasing might suit you more.

Can You Get Car Installment Without a Bank?

Yes, you can get car installment in Saudi Arabia without going through a bank. Here are your main options:

1. Direct Installments from Dealerships

You deal directly with the dealership offering installment plans.

Pros:

• Simple paperwork
• Fast approval

Cons:

• Higher prices
• Fewer car options

2. Non-bank Finance Companies

Private companies offer installment plans directly.

Pros:

• Multiple car options
• Easier qualification

Cons:

• Higher administrative fees

3. Individual or Private Financing

Some individuals or private businesses offer car installment options.

Pros:

• Highly flexible terms
• Direct negotiation

Cons:

• Legal risks
• Lack of regulation

What Is the Best Car Financing Option in Saudi Arabia?

Your ideal option for car installment depends on your budget and preferences:

• Bank Financing: Best for those with good credit and stable income.
• Non-bank Financing: Great if you want easier and faster processing.
• Dealership Installments: Ideal for fast, no-fuss purchases.
• Leasing: Useful if you prefer flexibility and lower monthly costs.
  

In conclusion, getting a car installment in Saudi Arabia is now easier and more flexible than ever, whether you choose bank financing, dealership installment, or private leasing. The key is to pick the method that best fits your financial situation and personal needs.

And if you’re looking for a safe, convenient experience in buying a car through installments, Soum offers the perfect solution. Soum provides a wide selection of well-inspected used cars with flexible installment plans, competitive prices, and full customer support throughout your purchase journey.