Nithan15
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This ^ Always have minimum 3rd party cover, comprehensive would be a good choice but then again based on your budget
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First Time car finance
- Thread starter travcaine
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This ^ Always have minimum 3rd party cover, comprehensive would be a good choice but then again based on your budget
TheChamp
Honorary Master
That is a serious stretch, a R35k car is for someone who knows their way around an engine, who does not mind getting their hands dirty, I can assure you it will be far from decent.
OP, if you are not convinced, I would advise you to draw up a spreadsheet of your cashflow and depreciation over the 6 years and think long about what you letting yourself in for. Actually, if you have any common sense, you would not have to think very long.
Let's do the basic maths on the back of a cigarette box:
On the assumptions of R125k cost, R35k deposit, 72 months, 11.25% interest, and 35% balloon payment, you will pay the bank a total of R143k. Add the R35k deposit you paid. Lets assume your insurance is R800p/m at 10% escalation, therefore your total premiums over the 6 years come to R74k. Thats a total paid of R252k over the 6 years for your installments and premiums.
Lets assume your depreciation is 15%, 12%,10%,8%,7%, 6% for each of the 6 years, by the end of the 6 years your precious little car will now be worth R52k.
So you have will a negative outflow of R200k!
On the other hand, you buy a R35k car and take third party only insurance of say R80p/m and take the same depreciation ratios as above. Your cost was R35k, plus R8k insurance and you will be sitting with an old car worth only R15k, but your total outflow would only have been R28k!
Of course there are many unforeseen events that might happen, you could write off your R35k car, it might not last 6 years, it will cost higher to maintain and repair than your new car, your friends might laugh behind your back. But you will have R170k to play with. Off course you will need the self discipline to invest monthly what you would have spend on your installment and premiums. At the end of the 6 years, you will be able to buy a much, much more more decent car and pay in cash for it.
I bought a R30k car in 2010 and sold it in 2016 for R20k after I put another 150 000km on it. And I am no backyard mechanic. Was I a bit lucky, probably yes. In the rare event I had to fork out R5k or so for a repair, I told myself its only 2 months worth of payments on a new car and moved on.
TheChamp
Honorary Master
After such a good lecture in economics I don't want to argue anymore. I also bought myself a cheap car(less than 50k) and I've never been stuck on the side of the road, contrary to all the 'expert advice' I got against buying that car.
During the course of owning my car I've become an expert in anything Corsa lite(at least that's what I think). The only mistake I did was financing the 49k asking price which I still regret today, thankfully I paid it off.
I am all for your idea but at the same time I realise that some people will get stuck because of a loose battery terminal, hence my comment about being hands on and knowing something about cars otherwise you going to make some mechanic very rich.
Wow, you turned my mind around completely. Thanks, I needed that
Back in 2011 when I bought my new car (then R140k) I earned 3 times what you earn now...and I regretted it then, and I regret it as a life decision even now.
You end up paying so much for something that depreciates rapidly, and you only spend an hour or so a day in on average.
Dont even look at that car. On R8k/m before deductions dont get into any more credit. Buy something for R35k cash as others have suggested. Or buy a cheap motorbike that'll cut your petrol bill and commute times by a huge margin.
You end up paying so much for something that depreciates rapidly, and you only spend an hour or so a day in on average.
Dont even look at that car. On R8k/m before deductions dont get into any more credit. Buy something for R35k cash as others have suggested. Or buy a cheap motorbike that'll cut your petrol bill and commute times by a huge margin.
SauRoNZA
Honorary Master
I would say buy something second hand with the 35k as well, or at the very least something much cheaper like an R80k Honda Jazz.
Even on the 35k cash purchase get full insurance and build a record so that when you can afford the real deal you have a proper history.
Also if you don't take full insurance you stand to lose that 35k from the moment you drive out of the place you bought the car and will be stuck without transport.
Insurance will only be about R400 max for that class of car and that's a hell of a lot more for the installment.
HOWEVER OP take that R1372 and put it on a scheduled transfer order into an investment account or even just a Flexi Deposit.
You'll build the habit of paying for a vehicle loan and managing money responsibly while also building a fund for when the **** hits the fan or you need to service the car or whatever.
Even on the 35k cash purchase get full insurance and build a record so that when you can afford the real deal you have a proper history.
Also if you don't take full insurance you stand to lose that 35k from the moment you drive out of the place you bought the car and will be stuck without transport.
Insurance will only be about R400 max for that class of car and that's a hell of a lot more for the installment.
HOWEVER OP take that R1372 and put it on a scheduled transfer order into an investment account or even just a Flexi Deposit.
You'll build the habit of paying for a vehicle loan and managing money responsibly while also building a fund for when the **** hits the fan or you need to service the car or whatever.
This
Some of the best advice I've ever got was from the CEO of the company I worked for quite a few years ago, who said before I decided on any substantial purchase, I should put the repayment money (incl insurance and any other monthly costs) away for 4 months before deciding whether I could afford it comfortably. Its served me well since then and stopped me doing a few stupid deals.
Putting that money into an investment account is even better advice.
This is pretty damn good advise right there. Been same boat as OP, wanted to purchase car but when you see amount paying to bank just on interest its bit too much to justify. Also if someone knocks you car and its R35k car you not gonna cry about it. But is someone knocks your R135k car, you going to cry about it.
I agree with doing the scheduled transfer to a investment or flexi deposit. I have been doing this for two years now, started with R2000pm, now R5000pm. Now IMO now and then you need to spoil yourself, otherwise just working you ass off and not seeing any benefit. So I spent bit of that on hobbies.
FYI, 24 and driving 98 corsa lite. Doesnt skip a beat and nice thing is can be redlined in the parking lots
haha. Had car since got out of school and done 100 000km with it. Its been through fender bender and fixed for R3000 (inc paint work). Actually reminds me need to get shocks check and new tires. When your friend stops next to you in his new R200k car, just remember... its not his till its paid off in 6 years. And by then his wasted 50k in interest and another R90k in depreciation.
Almost purchased a car other day buuut didnt bite the bullet. Didnt feel right.
Rather saving my money for decent deposit to buy some land.
Buddy lemme get this right you got credit card, clothing account and cellphone contract. You earn R8000 p/m so why do you want to put yourself into more debts. I can do your budget and you are going to regret your decision three months down the line.
My advice close the clothing account and finish that cellphone contract, you will be left with credit card that is when you can think of applying for a finance to buy a brand new car. My other advice close two accounts and maybe save some more get yourself a decent second hand car like second generation Kia Picanto, Hyundai Get or i10 those cars you can get under R70k. But honestly with R8000 you would not survive I earn more than you I bought Honda Brio but I had to adjust my budget cut few things.
My advice close the clothing account and finish that cellphone contract, you will be left with credit card that is when you can think of applying for a finance to buy a brand new car. My other advice close two accounts and maybe save some more get yourself a decent second hand car like second generation Kia Picanto, Hyundai Get or i10 those cars you can get under R70k. But honestly with R8000 you would not survive I earn more than you I bought Honda Brio but I had to adjust my budget cut few things.
You earn R8000 before deduction rather go for a decent second car Hyundai Getz it's your first car no need to be hard on yourself. I'm around same age as you insurance is bloody expensive when it come to us youngster. The are service plans to take into consideration, close the credit card and that cellphone account be left with clothing account. Anywhere which car you testing driving tomorrow.
playa4life
Well-Known Member
So much good advice in this thread!!! I hope the OP took the advice to head.
PS: We have two cars - A 94 model and a 99 model. Owe nothing on both cars. Can easily sell both cars and sit with R90K as deposit on next car. But, then we'd only have one (expensive) car. We need two cars. Our two cars are, and have been treating us extremely well since buying them. All it takes is regular maintenance and services. Dont skimp on your old car. look after her and she will look after you! While our cars are treating us well, I am ploughing whatever extra money we have into our bond. we've made peace with the fact that we wont be driving the newest, most expensive cars anytime soon and we're happy with that! We're not arsed with what the Jones' are driving. We're more concerned with paying extra into our bond than driving new cars. Friends and family usually try taking the mickey out of us at gatherings with regard to our older cars but I just respond with a "So... how much a month are you paying for that Lexus/TypeR/BMW you are driving?" To which they sheepishly would back off of after that.
PS: I would never, and I mean never, sell my little '94 160i Conquest! I've been offered R50k for it already and have a standing offer of R45k should I decide to sell, but I know that no new car is gna give me what this little Toyota has!
PPS: Plans are to start saving up for a Fortuner soon and buy it for cash after about 18 months.
Be smart.
Do the right thing!
#ScrewTheJones'
PS: We have two cars - A 94 model and a 99 model. Owe nothing on both cars. Can easily sell both cars and sit with R90K as deposit on next car. But, then we'd only have one (expensive) car. We need two cars. Our two cars are, and have been treating us extremely well since buying them. All it takes is regular maintenance and services. Dont skimp on your old car. look after her and she will look after you! While our cars are treating us well, I am ploughing whatever extra money we have into our bond. we've made peace with the fact that we wont be driving the newest, most expensive cars anytime soon and we're happy with that! We're not arsed with what the Jones' are driving. We're more concerned with paying extra into our bond than driving new cars. Friends and family usually try taking the mickey out of us at gatherings with regard to our older cars but I just respond with a "So... how much a month are you paying for that Lexus/TypeR/BMW you are driving?" To which they sheepishly would back off of after that.
PS: I would never, and I mean never, sell my little '94 160i Conquest! I've been offered R50k for it already and have a standing offer of R45k should I decide to sell, but I know that no new car is gna give me what this little Toyota has!
PPS: Plans are to start saving up for a Fortuner soon and buy it for cash after about 18 months.
Be smart.
Do the right thing!
#ScrewTheJones'
So, this thread has blown my mind. I was considering a R200k car as my first car but this thread has really blown my mind into perspective.
I currently really need a car but I've just started a job (R16k p/m after deductions). I'm looking at getting myself a Jazz as every single one I've encountered seems to be tough as nails and realiable.
I'm also worried about the costs of taking an older car regarding service and maintenence costs.
Other than a Jazz, what other reliable cars would you suggest?
I currently really need a car but I've just started a job (R16k p/m after deductions). I'm looking at getting myself a Jazz as every single one I've encountered seems to be tough as nails and realiable.
I'm also worried about the costs of taking an older car regarding service and maintenence costs.
Other than a Jazz, what other reliable cars would you suggest?
TheChamp
Honorary Master
A brand new Toyota yaris 1.0l at R191 400, including a 3 year/100k kms and a 3 years/ 45k kms service plan. For safety you get 4 airbags, ABS, EBD, brake assist as well as a 5 star safety rating for your peace of mind.
If it was my money though I would still go for a second hand low mileage Honda Jazz with a balance of service and warranty plans, it's an all round good car with very little to fault.
rietrot
Honorary Master
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Anything you like thats is about 2years old and still has a. engine plan or warrantee. Do a propper budget and safe the amount tou are willing to spend on a car for a few months to see if you can comfortably live without it.
2-3 Year old cars has hit a sweet spot were you still get them new and in good condition with the guarantees but the depreciation is starting to slow. The first 2 years the depreciation on cars is crazy.
Something cheap is also a great option. All the common brands(small cars) are cheap to fix. Almost anything that isn't a major engine failure can be fixed for under R1000. Shop around on the classifieds and compare cars and prices.