Buying a Car Under the 60% LTV Cap (CBSL July 2025)

What the 60% LTV cap is

In July 2025, the Central Bank of Sri Lanka issued Direction No. 04 of 2025, capping motor-vehicle financing at 60% loan-to-value. The directive applies to:

• All banks providing motor-vehicle leases or hire-purchase agreements
• All NBFIs — Non-Bank Financial Institutions — including LOLC, LB Finance, People’s Leasing, HNB Finance, Pan Asia and Seylan
• All motor-car purchases, both new and used, both personal and commercial

For a Sri Lankan car buyer, this means the minimum cash down payment is 40% of the landed price. There is no workaround: the directive is regulatory, not lender-specific, and applies to every legal financing arrangement available in the Sri Lankan market.

Why CBSL introduced the cap

Sri Lanka reopened private vehicle imports in February 2025 after a four-year ban. Demand exploded immediately — and CBSL quickly recognised that easy financing would translate the demand into rapid LKR depreciation and import-bill pressure. The 60% cap is a macroprudential brake: it dampens credit-driven import volumes by forcing buyers to commit substantial own-funds before any leverage kicks in.

What this means for your math

The most useful way to think about the cap is as a cash multiplier:

Cash you have	Maximum landed price the cap allows
LKR 3M	LKR 7.5M
LKR 4M	LKR 10M
LKR 5M	LKR 12.5M
LKR 6M	LKR 15M
LKR 8M	LKR 20M
LKR 12M	LKR 30M
LKR 20M	LKR 50M

If you have less cash than the multiplier requires for your target car, you have three choices:

1. Save more cash until you can afford the down payment
2. Pick a cheaper car that fits the cap with your current cash
3. Get a co-borrower whose income (not assets) can support a larger lease — this still requires the 40% cash down, but a co-borrower can broaden the income side of the qualification

Worked example 1 — Toyota Aqua, landed LKR 12.5M

The volume first-real-car target.

Line	Amount (LKR)
Landed price	12,500,000
40% down payment	5,000,000
60% financed	7,500,000
Tenure	7 years (84 months)
APR	13.5%
Monthly payment	~138,000
Total interest paid over 7 years	~4,100,000
Total cost of ownership	~16,600,000

For a buyer with LKR 5M cash who wants to upgrade from a tuk-tuk or hand-me-down to a real first car, the Aqua at LKR 12.5M is the structural sweet spot under the cap.

Worked example 2 — Honda Vezel Hybrid Z, landed LKR 17M

The natural step up.

Line	Amount (LKR)
Landed price	17,000,000
40% down payment	6,800,000
60% financed	10,200,000
Tenure	7 years (84 months)
APR	13.5%
Monthly payment	~188,000
Total interest paid	~5,580,000
Total cost of ownership	~22,580,000

A LKR 188,000 monthly instalment requires a household income comfortably above LKR 700,000/month for safe debt service — this is structurally a senior professional / dual-income-family purchase, not a first-real-car decision.

Worked example 3 — Toyota Vellfire Hybrid, landed LKR 38M

The luxury 7-seater band.

Line	Amount (LKR)
Landed price	38,000,000
40% down payment	15,200,000
60% financed	22,800,000
Tenure	7 years (84 months)
APR	13.5%
Monthly payment	~420,000
Total interest paid	~12,460,000
Total cost of ownership	~50,460,000

The luxury-class buyer is, by definition, the buyer with at least LKR 15M in liquid cash. Most Vellfire buyers we work with put down 50–60% rather than the minimum 40%, both because they have the cash and because they want to limit total interest paid.

Tenure and APR — what to negotiate

The 60% cap is fixed; the rest of the lease structure is negotiable.

Tenure

NBFIs offer up to 7 years for motor cars; banks typically offer up to 5 years at marginally lower rates. Longer tenure means lower monthly payments but higher total interest. For most buyers, 7 years at NBFI is the right balance — keeps monthly burden manageable while letting you prepay if your circumstances improve.

APR

Typical NBFI rates as of April 2026:

Lender type	Typical APR
Major bank (HNB, Commercial, Sampath, DFCC)	11.5–13.0%
Major NBFI (LOLC, LB Finance, People’s, Pan Asia)	13.0–14.5%
Smaller NBFI	14.5–16.0%

Bank rates are tighter but approval is harder and slower. Most cardreams.lk customers go with NBFI for the speed and tenure flexibility.

Hidden costs

Pay attention to:

• Stamp duty and processing fees — typically 1.5–2.5% of the financed amount, payable at lease draw-down
• Insurance — comprehensive insurance is mandatory for all leased vehicles; budget LKR 80,000–250,000/year depending on vehicle value
• Early settlement fee — most NBFIs charge 1–3% to settle the lease early (matters if you plan to upgrade in 3 years rather than 7)
• Insurance commission — some lenders bundle in an insurance commission. Always check the all-in monthly cost, not just the headline interest rate

How to plan your purchase under the cap

1. Start with your cash, not the car. Your cash sets the ceiling; the cap is a hard wall.
2. Use the 2.5x multiplier to translate cash into maximum landed price.
3. Get a real landed-price quote before committing — see our landed-price guide for the math, or send us your spec on WhatsApp for a live figure.
4. Get pre-qualified with two lenders before the auction bid commits. Don’t bid on a specific car until at least one lender has approved your spec at the right CIF.
5. Negotiate APR, not just monthly payment. A 50-basis-point reduction over 7 years saves LKR 200,000+ on a typical Vezel lease.
6. Comprehensive insurance is non-optional. Bind it at the same time as the lease draw-down so the car is covered the day it leaves DMT.

What we do for you

For every car on cardreams.lk, we:

• Show you the full landed price up-front so the 40% calculation is transparent
• Coordinate pre-qualification across our 9 NBFI partners — LOLC, LB Finance, People’s Leasing, HNB, Commercial Bank, Sampath, DFCC, Pan Asia, Seylan
• Run the lease math at multiple tenures and APRs so you can pick the structure that fits your cash flow
• Lock the financing before bidding so the deal closes on the day the car arrives at DMT

Get a quote and we’ll come back with realistic financing scenarios for your cash and target vehicle.

Read also

• The Real Landed Price of a Japanese Import — the math the LTV cap applies against
• How to Import a Car from Japan to Sri Lanka — full process timeline
• LTV cap glossary entry — short-form definition
• NBFI glossary entry — the major Sri Lankan motor-vehicle lenders
• CBSL glossary entry — the regulator setting the cap