Minimum salary for car finance?

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Techno5

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Hi guys. Nice informative forum.

I just want to ask what is the mimumun salary one must earn in order to qualify for car finance?

I dnot earn much, I've been working for round about a year and-a-half permanently, I do clear R3000 p/m monthly at the least for now, highly likely for me to be bumped up in salary in 5 months time.
With my deposit I've calculated via wesbank that I'd pay around R1000 (15% p/a) + R500 (random insurance figure; I'm 22 btw).

P.S the car I'm looking at is a 2007 Hyundai Getz.So essentially I'm looking to spend round about half my income on finance.
Would be there be a hindrance for me not qualifying for finance? I dnot have a credit card or accounts and stuff
I still live with my folks, so running/maintanance/service costs and fuel they are to help.
 
Depends on the loan amount. The general rule with interest rates being as they are is ~ R1000 pm for every R40000 you borrow over a 54 month term. Your monthly repayment also cannot exceed 30% (or 33%?) of your gross.

With the NCA they'll also take your monthly expenditure into account. It's best to speak to whoever will be doing your finance to give you a guestimate if you will qualify, without actually applying.

Oh and if you don't have a credit record, then your chances will be slim anyway. Start a clothing store account and then buy a few small things with the card every now and then, and take out a cheap cellphone contract. This will go a long way in building your credit record.
 
After the last few thread where people aged 25 was paying over R1000 for insurance ? Dont know pretty much depends on the car in question, just my gut feeling is R500 is way too low.
 
biena said:
After the last few thread where people aged 25 was paying over R1000 for insurance ? Dont know pretty much depends on the car in question, just my gut feeling is R500 is way too low.
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definitely depends on the car as well as the insurance, decent brokers FTW
 
When you say half your income are you talking half nett or half gross?
 
biena said:
After the last few thread where people aged 25 was paying over R1000 for insurance ? Dont know pretty much depends on the car in question, just my gut feeling is R500 is way too low.
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I'm 27 and I pay R600 for a R30 000 car
 
The banks will finance a car with a payment of UP to 25% of your nett salary. You will never get finance for 50% of your salary, I'm afraid.
 
Yeah sentiments. I think you need to pick R1000 as a realistic random insurance figure. I think my brother is spending around 40% for everything on his new car, didn't see his salary payslip but he says he earns a tad over 5k a month, so I really don't kno.
 
Khanya said:
Yeah sentiments. I think you need to pick R1000 as a realistic random insurance figure. I think my brother is spending around 40% for everything on his new car, didn't see his salary payslip but he says he earns a tad over 5k a month, so I really don't kno.
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He's virtually exempt from tax, so he pays around R2k per month towards a car.

IMO if you're not earning much then you should seriously reconsider buying a relatively new car. Buy a reliable old cheapie (something Japanese from the 90s) for around R20k and don't insure it. Put the money saved towards a deposit on a newer car when you're earning more.
 
Mike Hoxbig said:
He's virtually exempt from tax, so he pays around R2k per month towards a car.

IMO if you're not earning much then you should seriously reconsider buying a relatively new car. Buy a reliable old cheapie (something Japanese from the 90s) for around R20k and don't insure it. Put the money saved towards a deposit on a newer car when you're earning more.
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at least take 3rd party insure though
 
One thing to keep in mind, excluding the fact that at age 22 you will be paying quite a bit for insurance, is that part of the NCA is affordability. [Quite a while ago that I worked on it, so might be a bit off]

Affordability according to the NCA means how much money you have left after all your debt is taken into consideration.

Let's say you currently clear R 3000.
You get a car for, let's say, R 1750
You get insurance for, let's say R 1000

Means you only have R 250 per month left over: if this is less than the minimum affordability allowed by the NCA, it will be illegal to give you finance.

[anything said above could be wrong]
 
Assuming 9%, no Balloon, no Deposit, repayment R1000 / month
54 Months: R44,000
72 Months: R55,000

Your debt to income ratio will be 33% which would be the maximum a bank will take into consideration when calculating your RTI (Repayment to Income). There does not appear to be a minimum take home defined in the NCA.
Remember to take into account that the car will cost you for Insurance, Fuel and Maintenance.
 
Maybe your folks could apply for the finance, but you will be much better off saving up and buying a cheapie on R3000 - 5000 / month.
 
zamedic said:
Assuming 9%, no Balloon, no Deposit, repayment R1000 / month
54 Months: R44,000
72 Months: R55,000

Your debt to income ratio will be 33% which would be the maximum a bank will take into consideration when calculating your RTI (Repayment to Income). There does not appear to be a minimum take home defined in the NCA.
Remember to take into account that the car will cost you for Insurance, Fuel and Maintenance.
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he wont get 9% on finance
 
33%? That means at R3000 net, the maximum you can qualify for is (33 x 3000/100) R990. You'd need to boost your deposit more or go for a cheaper car. Anyways you can always finance through your parents. That's easier and hassleless.
 
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