Vehicle Finance Calculator

How your monthly vehicle lease installment is calculated

Most banks and finance companies in Sri Lanka quote vehicle leases and loans on a reducing-balance basis. Each month you pay the same installment, but the interest part is charged only on the amount you still owe, so it shrinks as the balance goes down while the capital part grows. The installment (often called the EMI) is calculated with the standard formula: EMI = P × R × (1 + R)^N ÷ ((1 + R)^N − 1), where P is the amount financed, R is the monthly interest rate (the annual rate divided by 12) and N is the number of monthly installments.

A worked example

Take a vehicle priced at Rs. 8,500,000. Under the Central Bank's 2026 limit, a new or recently imported car can be financed up to 40% of its value, so the minimum down payment is 60% (Rs. 5,100,000) and you finance Rs. 3,400,000. At 14% a year over 5 years (60 installments), the monthly installment is Rs. 79,112.05. Over the full term you pay Rs. 1,346,723.17 in interest, so the vehicle costs Rs. 9,846,723.17 in total including the down payment. You can reproduce these figures with the calculator above.

How the down payment changes the installment

From 25 May 2026, CBSL Act Directions No. 01 of 2026 cap financing for motor cars, SUVs, vans and three-wheelers at 40% of the vehicle's value if it is unregistered or has been registered in Sri Lanka for less than one year, and at 60% if it has been registered in Sri Lanka for more than one year. The cap applies to leases, hire purchase and loans from banks, finance companies and leasing companies. For the same Rs. 8,500,000 new vehicle at 14% over 5 years, a 60% down payment means an installment of Rs. 79,112.05, 70% means Rs. 59,334.04 and 80% means Rs. 39,556.03. Every extra 10% you pay upfront lowers the installment by about Rs. 19,778 and also reduces the total interest. Letters of credit opened before 25 May 2026 may still qualify for earlier, higher limits, so confirm the maximum with your lender.

Shorter or longer term?

A longer term lowers the installment but increases the total interest. Financing Rs. 3,400,000 at 14%: over 3 years the installment is Rs. 116,203.94 with Rs. 783,341.88 interest; over 4 years Rs. 92,910.02 with Rs. 1,059,680.96 interest; over 5 years Rs. 79,112.05 with Rs. 1,346,723.17 interest; and over 7 years Rs. 63,716.04 with Rs. 1,952,147.31 interest. Choose the shortest term whose installment fits comfortably in your monthly budget.

Flat rate or reducing balance: compare like with like

Some offers are quoted as a flat rate, where interest is charged on the original amount for the whole term even though you repay it month by month. A flat rate therefore looks much lower than a reducing-balance rate for the same cost. In the example above, 14% flat on Rs. 3,400,000 over 5 years adds Rs. 2,380,000 of interest and an installment of Rs. 96,333.33, which is about the same as a 23.25% reducing-balance rate. Put the other way, 14% reducing balance costs about the same as a 7.92% flat rate. Always ask the lender which method a quoted rate uses, and compare offers using the same method. This calculator uses the reducing-balance method.

What to check before you sign

• The interest rate and whether it is flat or reducing balance, and whether it is fixed for the whole term.
• One-off charges such as documentation, valuation and processing fees, which add to the real cost of the facility.
• Insurance requirements: lenders usually require comprehensive insurance for the full term, which is an extra monthly or yearly cost.
• Early settlement terms: whether you can pay off the balance early and what charge applies if you do.
• Ownership: under a lease the finance company is usually the absolute owner until the last installment is paid, and you are the registered owner who uses the vehicle.

Financing an imported vehicle

If you are importing a vehicle, first estimate its total landed cost, including Customs Import Duty, the surcharge, Excise Duty, Luxury Tax, VAT and SSCL, with our import tax calculator. Then use that landed cost as the vehicle price here to see what the installment would be. Open the import tax calculator

These figures are estimates for planning only. Your actual installment depends on the rate, fees and terms offered by your bank or finance company.