Arthur
Honorary Master
Yes. Household debt levels are shocking. Financial anxiety and distress levels are rising fast and set to get a lot worse.
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Quantum Theory
Executive Member
If you cannot get to work, you are not going to earn a salary. Car finance is a necessary expense. Just make sure it is not too big an expense... and you'll be fine.
Arthur
Honorary Master
No it's not. Millions of carless South Africans work and commute daily. Join them, work hard, save. Within two years you'll have accumulated what you need. It might not be what you want, but it'll be good enough.
For someone with ambition, the surest way to cramp your future is to mortgage it for a depreciating asset. Rather put the money into an appreciating asset/investment.
Went spend your best years working for the banks and the taxman.
But far more important is learning the habit that appetite must not trump prudence. If you learn that well, you'll be the envy of your peers at forty.
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Sinbad
Honorary Master
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Of course the eu5 engines here don't actually meet eu5 standards and are generally detuned and depowered because our fuel is somewhere around EU minus 2 quality
Quantum Theory
Executive Member
Thanks for that pearl.
So, I can make a great salary, doing tech support all over Cape Town... but I need a car. Not many jobs out there. Damn. I will rather flip burgers around the corner, until I can afford a car cash.
Arthur
Honorary Master
Maybe you need to read a little better. I didn't advise the OP to not have a car. I said drive the skedonk you currently have.
Quantum Theory
Executive Member
That is not what you said in the post I quoted.
Arthur
Honorary Master
It's in context. You statement that a car is necessary is too sweeping. It might be true for some, but not most.
For those who must have a car to earn, get the cheapest reliableish vehicle you can find - as the OP already has.
I know what I'm talking about, btw. From personal experience.
For those who must have a car to earn, get the cheapest reliableish vehicle you can find - as the OP already has.
I know what I'm talking about, btw. From personal experience.
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Quantum Theory
Executive Member
You cannot edit posts after I quoted them and then tell me I must read properly.
My point... Some people, myself included, cannot earn the salary they do without financing a reliable car. This is not London, where you can get anywhere on the Tube and bus.
Arthur
Honorary Master
I'm on a phone so don't see your post while I'm still typing and correcting. Half the time my finger hits SAVE before the post is done. Sorry. 
Quantum Theory
Executive Member
Then stop correcting. Post right first time.
Quantum Theory
Executive Member
There you do it again... Seriously?
Arthur
Honorary Master
I know.
But far too many young South African males splash out inordinately on a shiny new financed car, fancy cellphone, financed TV, PC and sound systems, and spend their best years working for the bank.
The main reason for this is uncontrolled appetite and financial idiocy. A bit of delayed gratification can make a massive difference in life.
That's my main point.
Rouxenator
Dank meme lord
73% of the times I went to work this year was on a bicycle. Currently I ride a 2014 Giant Revel 0 that cost me R6k cash.
Partialy correct. I remember when I bought my last car in 2010 they had just stopped with the detune process. I jave done 44500km on a stock standard EU5 engine with no problems.
Lol that is way below what I consider to be a balance between spending and investing. I enjoy driving and refuse to drive around in a skedonk if I can afford a car I will enjoy driving. Drive your skedonk if it makes you happy, im not about that life...
richjdavies
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I guess that's the point... If you can afford it. But if you're getting a loan... by some definitions, you CANT afford it
I guess that's the point... If you can afford it. But if you're getting a loan... by some definitions, you CANT afford it
Because you buy everything cash? Including your home? Well im glad there are institutions that are helping me afford it...
Arthur
Honorary Master
C'mon, man. No-one is suggesting credit is bad or that you should buy your house cash. This is not a moral or binary issue, either all one or all the other. It depends.
Long term debt is for most of us an essential mechanism for acquiring fixed property, for example.
But going into debt to fund consumables is the road to ruin.
All I am suggesting is that for most young people starting out their working lives, going into multi-year debt for the capital component of their transportation costs is imprudent and unwise.
I have seen it dozens of times ... Young man finishes school or university, gets his first job, and within three months has two thirds of his nett emolument committed in hire purchase contracts, all at max ladofca interest rate. Within a year the financial stress begins to take its toll.
One in a thousand takes the long term view, drives the fifth-hand hand-me-down from mom or gran for as long as possible, saving every spare cent.
Five years later, our first lad drives his second new car (the first was pranged), pays the same percentage of his pay servicing debt. The prudent one buys a new car cash, and is putting the rest into fixed property, RAs, our some other investment. Ten years later we see the really big difference. Etc.
This ability to take the long-term view, to sacrifice immediate gratification for long-term benefit, is of course also evident in the person's approach to work and other areas of life. Usually they're your best employees, and very often fast track to senior management or end up being entrepreneurs and business owners.
They understand how to balance today and the future.
A single person starting out their working life with a brand new motorcar financed through a debt with instalments more than 10% of their take-home pay is in my experience a good indicator of someone who can't see tomorrow.
Long term debt is for most of us an essential mechanism for acquiring fixed property, for example.
But going into debt to fund consumables is the road to ruin.
All I am suggesting is that for most young people starting out their working lives, going into multi-year debt for the capital component of their transportation costs is imprudent and unwise.
I have seen it dozens of times ... Young man finishes school or university, gets his first job, and within three months has two thirds of his nett emolument committed in hire purchase contracts, all at max ladofca interest rate. Within a year the financial stress begins to take its toll.
One in a thousand takes the long term view, drives the fifth-hand hand-me-down from mom or gran for as long as possible, saving every spare cent.
Five years later, our first lad drives his second new car (the first was pranged), pays the same percentage of his pay servicing debt. The prudent one buys a new car cash, and is putting the rest into fixed property, RAs, our some other investment. Ten years later we see the really big difference. Etc.
This ability to take the long-term view, to sacrifice immediate gratification for long-term benefit, is of course also evident in the person's approach to work and other areas of life. Usually they're your best employees, and very often fast track to senior management or end up being entrepreneurs and business owners.
They understand how to balance today and the future.
A single person starting out their working life with a brand new motorcar financed through a debt with instalments more than 10% of their take-home pay is in my experience a good indicator of someone who can't see tomorrow.
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Hamster
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I guess that's the point... If you can afford it. But if you're getting a loan... by some definitions, you CANT afford it
People use debt to buy machinery etc. they cannot afford to startup a business so that they can pay back the debt and then start making a profit. If we didn't have people making debt the economy would stagnate.
Debt is "good" as long as you are absolutely sure you can afford it. Unnecessary debt though (like the top spec car model instead of the base) is just stupid if you cannot comfortably repay it. If you can JUST make the repayment you went too high.