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The short answer
Nigerian banks typically ask for 10% to 30% of the car's price as an equity contribution. As at October 2026, Access Bank lists equity as low as 10%, Stanbic IBTC lists 10%, and Sterling Bank lists 20% for new and 30% for used vehicles. A bigger deposit lowers the loan, the monthly repayment and total interest; on a ₦20 million car at an illustrative 30% a year over 48 months, moving from 10% to 30% equity cuts the monthly payment by about ₦144,000.
The equity contribution, or deposit, is the part of the car's price you pay yourself before the lender finances the rest. It is often the hardest part of buying a car on credit, because it must be cash in hand. This guide explains why lenders ask for it, what Nigerian banks currently list and how much difference a larger deposit makes.
Why lenders ask for equity
- A cushion against falling value. A car loses value from the day it leaves the showroom. If the loan equals the full price, the car can soon be worth less than the debt. Equity keeps the loan below the car's value.
- Commitment. A borrower who has put in their own money has more reason to keep paying.
- Affordability. Saving the deposit shows you can set money aside regularly, which is what repayments require.
What Nigerian banks list (as at October 2026)
| Lender | Equity listed | Tenor listed | Notes |
|---|---|---|---|
| Access Bank | As low as 10% | Up to 60 months | Up to ₦400m new, ₦200m pre-owned; no penalty for early repayment |
| Stanbic IBTC | 10% | Cars up to 5 years | Salaried customers; used cars over 20 years old and over 120,000 km not financed |
| Sterling Bank | 20% new, 30% used | 48 months new, 36 months used | 39% a year, 1% management fee, insurance 5% of vehicle value |
Each bank's own page sets these terms and they can change. Your offer letter may ask for more equity than the headline if your income, credit history or the car's age points to higher risk.
By lender type
- Banks tend to sit between 10% and 30%, with higher equity for used cars, as Sterling's listing shows.
- Dealer-arranged finance sometimes advertises lower deposits, with the cost made up elsewhere; see dealer versus bank finance.
- Hire purchase may use an initial payment rather than equity; see hire purchase for cars.
How equity changes the monthly figure
Example only. A car costs ₦20,000,000. The loan is at an illustrative 30% a year on a reducing balance over 48 months. Fees and insurance are left out to isolate the effect of equity.
| Equity | Deposit | Loan | Monthly repayment | Total repaid | Total interest |
|---|---|---|---|---|---|
| 10% | ₦2,000,000 | ₦18,000,000 | ₦648,108 | ₦31,109,179 | ₦13,109,179 |
| 20% | ₦4,000,000 | ₦16,000,000 | ₦576,096 | ₦27,652,603 | ₦11,652,603 |
| 30% | ₦6,000,000 | ₦14,000,000 | ₦504,084 | ₦24,196,028 | ₦10,196,028 |
Moving from 10% to 30% equity means finding ₦4,000,000 more upfront, but it cuts the monthly payment by ₦144,024 and total interest by ₦2,913,151. Whether that is worth it depends on what else that cash would do for you and how tight the monthly figure is.
Where to find the deposit
- Save it first. A dedicated savings plan with a target date is the cheapest route; see how to save for a car.
- Trade in your old car. Many dealers accept part-exchange as part of the deposit.
- Avoid borrowing the deposit. A personal loan for the equity means two sets of repayments on one car and defeats the cushion the lender wants.
What to check first
- The equity percentage in your offer letter, not only the advert.
- Whether fees and the first year's insurance are paid upfront on top of equity.
- Whether a used car changes the equity or tenor, as with Sterling's 30% and 36 months.
- How the monthly figure compares with your take-home pay.
- See car loan requirements for the documents you will need.
Upfront costs beyond equity
The deposit is not the only cash you need on the day. Depending on the lender, budget for:
- Management or processing fees, for example 1% at Sterling Bank as at October 2026.
- The first year of comprehensive insurance, if it is not added to the loan.
- Registration, plate numbers and documentation.
- A tracker, if the lender requires one.
Example only. On a ₦20,000,000 car with 20% equity (₦4,000,000), a 1% management fee on the ₦16,000,000 loan is ₦160,000, and insurance at 5% of value is ₦1,000,000. The cash needed upfront is then ₦5,160,000 before registration, not ₦4,000,000.
Is a bigger deposit always better?
Not always. Putting every naira into the deposit can leave you with no emergency fund, and a car brings repairs, insurance renewals and fuel costs. A sensible balance keeps some savings aside after paying equity, even if that means a slightly higher monthly repayment. If the repayment is only affordable with nothing left over, the car is probably too expensive for now.
Where Pryme fits
A Fixed or Flexible Savings Box can hold your car deposit apart from everyday money until you are ready; rates are shown in the app. Pryme does not offer car loans.
Questions people ask
How much deposit do I need for a car loan in Nigeria?
Usually 10% to 30% of the price. As at October 2026, Access Bank lists as low as 10%, Stanbic IBTC 10%, and Sterling 20% for new and 30% for used cars.
Can I get a car loan with no deposit in Nigeria?
It is uncommon with banks. Some dealer or hire purchase schemes advertise low deposits, but check the total cost.
Why is the deposit higher for a used car?
Used cars carry more risk of breakdown and faster loss of value, so lenders such as Sterling ask for more equity and shorter tenors.
Does a bigger deposit reduce interest?
Yes. You borrow less, so total interest falls; in our ₦20 million example, 30% equity saves about ₦2.9 million in interest compared with 10%.
Sources
- Access Bank: Vehicle Finance · accessed Oct 2026
- Stanbic IBTC: Vehicle and Asset Finance · accessed Oct 2026
- Sterling Bank: Loans · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.