The monthly repayment on a car loan is just one part of the cost, which at first might appear cheaper. Remember, there’s a also a large upfront cost, which includes a down-payment (typically 20% of the car price), interest payable on the loan (approx 4% per year), insurance for the year, registration fees, as well as ongoing servicing costs and the high cost of up to 25% depreciation of the car value in just the first year alone.