Financing a new or imported vehicle in Botswana
In Botswana, cars are mainly financed through an instalment sale with FNB, Absa, Stanbic or Bank Gaborone, the bank remaining owner of the DRTS-registered vehicle until the last payment in pula, with comprehensive insurance compulsory.
The instalment sale, the dominant formula
Botswana banks finance vehicles through instalment sale agreements: the buyer drives the car but the bank is recorded as its registered owner. Ownership only passes once the final instalment has been paid and the financier's interest has been lifted.
Dealerships in Gaborone and Francistown
Toyota, Ford, Nissan and Volkswagen dealers in Gaborone and Francistown sell new vehicles that are often shipped in from South Africa. Thanks to the SACU customs union, these cars pay no additional customs duty when they cross the border.
Used imports from Japan
A large part of the vehicle fleet consists of used cars imported from Japan and landed at Durban or Walvis Bay. Banks often limit the age of the vehicle they finance, which steers these purchases towards cash or a personal loan.
Maximum vehicle age and mileage
For a used model, the bank sets a maximum age at the end of the contract and may require an inspection report. A six-year-old Toyota Hilux bakkie bound for Kalahari roads will not necessarily get the same term as a recent model.
14% VAT and the on-the-road price
Dealer prices include value added tax at 14%, collected by the Botswana Unified Revenue Service. For a private import, excise duties and VAT are added to the declared value and must be paid before the vehicle can be registered.
Registration and roadworthiness at the DRTS
The Department of Road Transport and Safety registers the vehicle, issues the number plate and checks the roadworthiness of imported cars. The bank has its interest as financier recorded there to prevent any resale without its consent.
Comprehensive cover and livestock collisions
The financier requires comprehensive insurance in its favour for the whole term of the contract. Collisions with cattle or wild animals on the A1 between Gaborone and Francistown weigh on the premiums charged to drivers across the country.
Deferred final payment, known as a balloon
Some banks allow part of the price to be pushed into a larger final instalment. The monthly payment falls, but the buyer must refinance or pay off that balance at the end of the contract, often just when the car is worth less.
Civil servants' deductions and debt ratio
Government employees often have their salary paid into the bank, which lenders appreciate. Combining a car loan with a Letshego loan or a personal loan in Botswana does, however, reduce the vehicle instalment the bank will accept against the remaining net salary.
Rates linked to the prime lending rate
Car loans in Botswana generally follow the prime lending rate, around 7% on average in 2026, plus a margin. The guide to credit in Botswana explains how the Monetary Policy Rate drives changes in that benchmark.
Bakkies, 4x4s and business use
In Ngamiland or the Central District, many households choose a bakkie that can carry livestock and handle sandy tracks. A dual-use vehicle may qualify for business finance if the owner declares farming or commercial activity to the lender.
Car finance in Lesotho, another SACU member
Lesotho also buys most of its cars through South Africa, but its banking market is narrower. The guide to the car loan in Lesotho lets you compare the deposits, terms and insurance requirements applied there.
Buying a car on credit in Gaborone
- Choose the vehicle and get a pro forma invoice from the dealer showing price, VAT and accessories.
- Apply to your own bank or the dealer's partner bank, attaching payslips and statements.
- Accept the offer after comparing rate, term, any balloon payment and admin fees.
- Take out comprehensive insurance naming the bank as beneficiary.
- Let the bank pay the seller and record its interest as financier with the DRTS.
- Collect the registered car and keep the repayment schedule until ownership is finally released to you.
Cost of a car bought on credit in pula
| Item | Amount or rule | Note |
|---|---|---|
| VAT on the price | 14% | Included in dealer prices |
| Loan rate | Prime lending rate plus margin (indicative) | Varies with profile and vehicle age |
| Deposit | Set by the bank | Higher for a used import |
| Comprehensive insurance | Monthly premium | Driver age, model and region |
| DRTS registration fees | Official tariff | Vehicle type and weight |
Documents for vehicle finance in Botswana
- Omang card, or passport with work permit
- Valid Botswana driving licence
- Last three payslips
- Three months of bank statements
- Dealer pro forma invoice
- Comprehensive insurance certificate noting the financier
Mistakes made by car buyers borrowing in pula
- Paying a deposit to a seller of Japanese cars found on social media without checking the vehicle or its DRTS registration.
- Choosing a large balloon payment without planning how to settle that balance when the contract ends.
- Selling the car before the loan is repaid while the bank is still its registered owner.
- Letting the comprehensive insurance lapse, which is a breach of the finance agreement with the bank.
Lenders to contact
- First National Bank Botswana: Botswana commercial bank granting loans to individuals and businesses, regularly publishing its deposit and lending interest rates for customers.
- First Capital Bank Botswana: Commercial bank operating in Botswana offering personal loans to individuals to help finance their personal needs and projects.
- Letshego Botswana: Botswana subsidiary of the Letshego group, an inclusive lender offering personal loans and digital financial services through its LetsGo app.
- Absa Bank Botswana: Commercial bank in Botswana, part of the Absa group, offering banking services and credit solutions to individuals and businesses.
Instalment sales and imported cars in Botswana
Will a bank finance a car imported from Japan?
Sometimes, if the vehicle is recent, cleared through customs, registered with the DRTS and inspected. Many banks set a maximum age, however, so older models are frequently paid for in cash or with a personal loan instead.
Who owns the car until the Botswana bank has been repaid?
Under an instalment sale, the bank remains the registered owner until the final payment. The buyer has the use of the car and is responsible for it, including servicing and insurance, but cannot sell it without the bank's agreement.
Does a car loan rate move with Bank of Botswana decisions?
Yes, when it is linked to the prime lending rate. An increase in the Monetary Policy Rate usually means a higher monthly instalment from the following month, unless the contract provides for a fixed rate.
Can an expatriate finance a car in Botswana?
Yes, with a work permit and a salary paid into a local account, but the finance term generally cannot exceed the length of the employment contract. Some banks also ask non-citizens for a larger deposit.