-
Ask a question and get free supportUnlock new privileges and see hidden discussionsWin prizes and earn reputation
-
Question of the day ~ Do you queue to fill up your car before the fuel price increase every month?
-
Afristay giveaway.Win a 2-night stay for two people at an establishment of your choice with R1,000 in spending money. Enter here.
Sign up with GoogleCash or finance a used car purchase of R200k +
- Thread starter aomar296
- Start date
KleinBoontjie
Honorary Master
- Joined
- Jul 30, 2010
- Messages
- 14,611
If you have the cash, by all means, use it
supersunbird
Honorary Master
- Joined
- Oct 1, 2005
- Messages
- 60,152
Difficult to say, since one can never be 100% sure if the market will beat what you safe on interest (which have a guaranteed "return" in effect). Obviously the lower the interest rate is one is offered, the better it is to keep the capital in a decent investment and take out vehicle finance.
Like the other guys said, you can't say what returns you'll end up with.
If you're investing in a normal bank investment account - waste of time - rather pay cash for the car.
If you have a house bond, may be better to throw the chunk of capital into the bond and finance the car over a shorter period.
If you're still undecided, use R60k-R100k on the car and finance the balance. The remainder of R140k-R100k invest either 100% into equities or split betw equities and more conservative investments to balance your risk. Check out the historic performance of the various shariah funds, choose one and put a chunk in there - balance into something less risky as the market seems pretty over-valued at the moment.
If you're investing in a normal bank investment account - waste of time - rather pay cash for the car.
If you have a house bond, may be better to throw the chunk of capital into the bond and finance the car over a shorter period.
If you're still undecided, use R60k-R100k on the car and finance the balance. The remainder of R140k-R100k invest either 100% into equities or split betw equities and more conservative investments to balance your risk. Check out the historic performance of the various shariah funds, choose one and put a chunk in there - balance into something less risky as the market seems pretty over-valued at the moment.
It's a bit hard to advise on the title since you didn't actually post anything after it.
No spelling errors though so that's a good start. As a title I'd give it a 6/10, some points were taken off for not having a post, so it's hard to say if the title is fitting or not.
No spelling errors though so that's a good start. As a title I'd give it a 6/10, some points were taken off for not having a post, so it's hard to say if the title is fitting or not.
If the cash is under your bed doing nothing, buy the car cash.
But as Dolby said, buying a "normal" car cash for that price is not wise, you can do better by investing the cash and finance the car.
Unless the car will be a classic/rare [read investment] (but no car @ +-R200k is at the moment) -IMO Alfa 4C is currently the cheapest new classic.
Your inflation salary increase will offset part of the fixed interest you pay over the finance term (if you sign fixed interest rate), and on the investment you will earn compounded interest/capital gains over the same term.
But as Dolby said, buying a "normal" car cash for that price is not wise, you can do better by investing the cash and finance the car.
Unless the car will be a classic/rare [read investment] (but no car @ +-R200k is at the moment) -IMO Alfa 4C is currently the cheapest new classic.
Your inflation salary increase will offset part of the fixed interest you pay over the finance term (if you sign fixed interest rate), and on the investment you will earn compounded interest/capital gains over the same term.
The investment could go wrong too making it a depreciating asset. Then he will have two depreciating assets.
Dolby
Honorary Master
- Joined
- Jan 31, 2005
- Messages
- 32,690
But it's a guarantee that his R100k car (for example) will be worth R60k in 2 years. With R100k simply sitting in a bank means he'll have over R100k.
Generally, never push large sums of cash into a depreciating asset - but I don't know his full story not knowledgeable enough to give real advice. It was just a FYI
Here are some questions for you to consider that will help you determine which choice to make...
Where is the R200k coming from? Surplus acumilated income, an investment, a policy that has matured, inheritance, severance package, etc.
How much is your current income and how much is left over after your monthly expenses?
How secure is your current income?
What portion of your current income is going into savings?
What short term and long term debt do you currently have or are considering making?
What assets do you currently have?
What financial responsibilities do you have currently and will potentially be undertaking in the next 5 years?
Lastly draw up a few spreadsheets so that you can calculate over 5years:
a) investment of R200k
b) R200k car finance monthly repayments over 5years
c) monthly investment equal to b)
d) what your current debts if any will cost over 5years
e) what your current debts if any reduced by R200k now will cost over 5years.
Don't forget to include initiation fees and monthly admin fees and costs of additional surety policies if needed.
Where is the R200k coming from? Surplus acumilated income, an investment, a policy that has matured, inheritance, severance package, etc.
How much is your current income and how much is left over after your monthly expenses?
How secure is your current income?
What portion of your current income is going into savings?
What short term and long term debt do you currently have or are considering making?
What assets do you currently have?
What financial responsibilities do you have currently and will potentially be undertaking in the next 5 years?
Lastly draw up a few spreadsheets so that you can calculate over 5years:
a) investment of R200k
b) R200k car finance monthly repayments over 5years
c) monthly investment equal to b)
d) what your current debts if any will cost over 5years
e) what your current debts if any reduced by R200k now will cost over 5years.
Don't forget to include initiation fees and monthly admin fees and costs of additional surety policies if needed.
SauRoNZA
Honorary Master
- Joined
- Jul 6, 2010
- Messages
- 47,910
Depends.
Are you going to invest the cash to offset the interest or are you simply going to blow the cash on something else.
If you are going to blow the cash, just buy the car. If you are going to invest it, considering a loan on the car instead.
Are you going to invest the cash to offset the interest or are you simply going to blow the cash on something else.
If you are going to blow the cash, just buy the car. If you are going to invest it, considering a loan on the car instead.
silver6933
Expert Member
- Joined
- Jan 3, 2006
- Messages
- 1,675
Cash is always king (based on that minimal post)
AlphaBravo
Expert Member
- Joined
- Dec 3, 2010
- Messages
- 1,556
Why pay interest if you can pay cash?
Dolby
Honorary Master
- Joined
- Jan 31, 2005
- Messages
- 32,690
... Because then you don't have the cash to earn interest.