Car finance question...

[koeks]

if you have paid for a car 15 months out of 36 months... i used this car for my business. which is dead now. so what do i do. keep on paying for the 19 months or just sell it even if i make a loss of R4k? but i will be saving close to R2.3k every month...

which is more sensible?

 

[ALFAHOLIC]

Go for the loss if you can't afford to pay the 2.3k/pm

Or pay it a little more and then sell it after you've paid off some money, which will then cancel your loss and in turn make a kind of profit, even though its actually not profit, but you making money back which is the most important thing

 

[dlevine]

simple, sell it. Look at it from a cash flow point of view, not a profit/loss point of view. A car is a cost, not an asset!!!

 

[Dean]

simple, sell it. Look at it from a cash flow point of view, not a profit/loss point of view. A car is a cost, not an asset!!!

Of course a car is an asset. All assets depreciate, cars are no different. People just love to sound like they know what they're talking about by saying things like "cars arent assets".

That's not to say you shouldn't necessarily sell it, but you may wanna rethink this dude's financial planning advice

 

[ALFAHOLIC]

LOL - ppl like to sound like they know what they talking about...lol probably heard it on TG - cars are not assets lol!

 

[Saffa]

A car is not an asset and not all asset depreciate. In the long run, your house appreciates and it has the potential for rental income. Your car depreciates and you just piss cash down the drain.

Dean is referring to accounting and not investments i.e. accruals vs cash flows.

I don't know what your other means of transport will be, but I assume you can do with out the car...so sell the thing and invest the R3k amonth. If you're just going to blow the extra cash on rubbish every month - keep the car. At least you'll have SOME value at the end of the term.

 

[McGuywer]

Sell it.

It just makes sense.

 

[Freaksta]

A car is not an asset and not all asset depreciate. In the long run, your house appreciates and it has the potential for rental income. Your car depreciates and you just piss cash down the drain.

Dean is referring to accounting and not investments i.e. accruals vs cash flows.

I don't know what your other means of transport will be, but I assume you can do with out the car...so sell the thing and invest the R3k amonth. If you're just going to blow the extra cash on rubbish every month - keep the car. At least you'll have SOME value at the end of the term.

Best advice, unless you are going to use that money paying off the car for something like investing etc... Keep the car

 

[Dean]

A car is not an asset and not all asset depreciate. In the long run, your house appreciates and it has the potential for rental income. Your car depreciates and you just piss cash down the drain.

Dean is referring to accounting and not investments i.e. accruals vs cash flows.

I don't know what your other means of transport will be, but I assume you can do with out the car...so sell the thing and invest the R3k amonth. If you're just going to blow the extra cash on rubbish every month - keep the car. At least you'll have SOME value at the end of the term.

Firstly, houses definitely do depreciate - in exactly the same way that cars depreciate. Cars definitely depreciate more quickly, but that's where the differences end.
Secondly, the 'potential for rental income' applies in exactly the same way to a car as it would to ones house.

LOL - ppl like to sound like they know what they talking about...lol probably heard it on TG - cars are not assets lol!

Na, Top Gear would never give such useless advice - you should feel ashamed for suggesting such a thing!
Seriously though, it's generally the ones who developed their finance skills from a quick read through Rich Dad, Poor Dad.

 

[koeks]

thanks guys... i will sell it and save what I'm paying on it... I'm looking at it from a cash flow point of view...

 

[Hogrod]

I'd say a car and a house are not true assets.

It's better to put your extra cash into an equity fund than it is to pay off your bond. You'll make more money in the long, be able to pay off the house in one swoop and have cash left over from your fund. And even though you've been paying extra interest on the house by not repaying your home faster, you'll still score.

 

[milomak]

a car is not an asset