New car help.

BCO said:
You're kidding, right? Gotta budget about R500p/m for insurance.
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Insurance covered.

So maybe a R5k-R10k deposit then.
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Yup

A residual is an amount still owing on the vehicle after the payment period has come to an end. So a 25% residual on a R100k car means you'd have to pay in R25k at the end of the 5 year (or whatever) payback period. On the plus side, it lowers the monthly amount you have to pay.
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As you say, to be avoided, it sounds like.
 
Devill said:
Ok new or second hand?
Does the 1.5k a month include her car insurance or will she be willing to pay another X amount for insurance ontop of the 1.5k/month for the car?

How old is your friend?
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Sorry, insurance is separate and covered.

Middle aged.
 
R1500 plus a small balloon payment would see you in an entry level Vivo, simply because the deposit is very low.

Rather go for a year old or a demo, that will raise the spec slightly.
 
As Mantis said, R1500 pm is a rather low budget for a car, especially a new one. I've often seen Renault ads for their entry level makes (Sandero??) for 'from' R1399 pm but then if you look at the fine print then you notice things like 20% deposits and 30% residuals. Stay away from residuals unless you're willing to re-finance the end of term balloon payment or know for sure you will have the cash to settle it. For R1500 pm I suggest a 'budget' entry level 2nd hand car but try get one with some sort of maintenance plan to avoid surprises if something breaks. Another option is to get pre-approved finance (I did this last year when shopping for a car) and then shop around knowing what your budget is. I doubt you'll get much trade in on the Opel (?) though...

Good luck!!
 
Fazda said:
R1500 plus a small balloon payment would see you in an entry level Vivo, simply because the deposit is very low.

Rather go for a year old or a demo, that will raise the spec slightly.
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Ta.

MartyMarts said:
As Mantis said, R1500 pm is a rather low budget for a car, especially a new one. I've often seen Renault ads for their entry level makes (Sandero??) for 'from' R1399 pm but then if you look at the fine print then you notice things like 20% deposits and 30% residuals. Stay away from residuals unless you're willing to re-finance the end of term balloon payment or know for sure you will have the cash to settle it. For R1500 pm I suggest a 'budget' entry level 2nd hand car but try get one with some sort of maintenance plan to avoid surprises if something breaks. Another option is to get pre-approved finance (I did this last year when shopping for a car) and then shop around knowing what your budget is. I doubt you'll get much trade in on the Opel (?) though...

Good luck!!
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Thanks.

:D

This thread makes me feel extremely dim witted. :(
 
Personal experience... New cars are a waste of money, the novelty of that fresh new car smell wears off as soon as the first payment goes off on ones account and to be quite honest, that new car smell is sold in bottles at Midas :)...

I'd consider going with a demo, or even a second hand vehicle with 30k or under on the clock...
Look at both new and used to compare prices and how it will impact your pocket.
Go check out the used section at the big dealers such as vw, second hand vehicles on a big dealer's second hand floor are generally pretty good.

Too good to be true internet deals are never as they seem, and neither are small time second hand dealers.
Car salesmen are famous for pushing you into putting down a holding fee (usually R1000 or so) on a vehicle to rope you in so watch out for that, only put something like that down if you're 100% certain.
Make sure you check whether the car's been in an accident, you can do that via the AA. Obviously not all people report their accidents but on a newish car, chances are that the previous owner would have fixed it via insurance claim and those require the accident to be reported.

Take note of the following whether you're buying new or used:

Don't buy the first thing you test drive, that's a huge mistake, shop around, compare a few cars that you like, unless the first thing you test drive has been the object of your desire for 2 years or more lol.
Dealerships will try to organize you what they call "the best finance", don't fall for that, often the person trying to organize the finance works their commission into the deal, do your own research, if their deal is better than what you can get, go for it.
Wesbank has good finance for what its worth (Even without a deposit), ABSA also does if you can afford the deposit.
Don't buy every car care extra that they try to sell you, that's easily another 7 grand depending on how easy you are to sell to :)

Really do your homework with the insurance, there are so many options available, make sure you do the math, especially if you intend on driving more than 10km a day, your chances of dinging the car are just that much higher if you do.

Definitely take a maintenance plan if its an option, for example, on my previous car (a polo) without a plan; VW ripped me 11k for a service the one time (granted i had to replace the clutch amongst other things).

If you take a residual/balloon value you WILL be sorry. Just don't do it, you'll either have to pay longer and more than you previously intended or get caught in a never ending cycle of trading in your vehicle to beat the residual from killing the deposit on a new car or eating into your savings.

Good luck :)
 
elvza said:
Personal experience... New cars are a waste of money, the novelty of that fresh new car smell wears off as soon as the first payment goes off on ones account and to be quite honest, that new car smell is sold in bottles at Midas :)...

I'd consider going with a demo, or even a second hand vehicle with 30k or under on the clock...
Look at both new and used to compare prices and how it will impact your pocket.
Go check out the used section at the big dealers such as vw, second hand vehicles on a big dealer's second hand floor are generally pretty good.

Too good to be true internet deals are never as they seem, and neither are small time second hand dealers.
Car salesmen are famous for pushing you into putting down a holding fee (usually R1000 or so) on a vehicle to rope you in so watch out for that, only put something like that down if you're 100% certain.
Make sure you check whether the car's been in an accident, you can do that via the AA. Obviously not all people report their accidents but on a newish car, chances are that the previous owner would have fixed it via insurance claim and those require the accident to be reported.

Take note of the following whether you're buying new or used:

Don't buy the first thing you test drive, that's a huge mistake, shop around, compare a few cars that you like, unless the first thing you test drive has been the object of your desire for 2 years or more lol.
Dealerships will try to organize you what they call "the best finance", don't fall for that, often the person trying to organize the finance works their commission into the deal, do your own research, if their deal is better than what you can get, go for it.
Wesbank has good finance for what its worth (Even without a deposit), ABSA also does if you can afford the deposit.
Don't buy every car care extra that they try to sell you, that's easily another 7 grand depending on how easy you are to sell to :)

Really do your homework with the insurance, there are so many options available, make sure you do the math, especially if you intend on driving more than 10km a day, your chances of dinging the car are just that much higher if you do.

Definitely take a maintenance plan if its an option, for example, on my previous car (a polo) without a plan; VW ripped me 11k for a service the one time (granted i had to replace the clutch amongst other things).

If you take a residual/balloon value you WILL be sorry. Just don't do it, you'll either have to pay longer and more than you previously intended or get caught in a never ending cycle of trading in your vehicle to beat the residual from killing the deposit on a new car or eating into your savings.

Good luck :)
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Pretty awesome 3rd post, brah :)
 
BCO said:
Pretty awesome 3rd post, brah :)
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Very... except for these bits:

elvza said:
Car salesmen are famous for pushing you into putting down a holding fee (usually R1000 or so) on a vehicle to rope you in so watch out for that, only put something like that down if you're 100% certain.

...

Dealerships will try to organize you what they call "the best finance", don't fall for that, often the person trying to organize the finance works their commission into the deal, do your own research, if their deal is better than what you can get, go for it.
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Kark on both counts.

  1. A holding fee secures the car for the buyer. Nothing more, nothing less. Be advised though that dealerships can legitimately label such an amount as an 'ordering fee', which might well be non-refundable. However, this will more often than not be the case on a new car, not so much on a 2nd-hand job. I do agree with the 'unless you're 100% certain'-bit.
  2. The F&I's (or Business Manager, as they like to be called) pay does not work this way. Like a normal salesman, they are paid commission on the money they generate for the dealership. This comes largely from kickbacks paid by the bank on any successful application that progresses to a car being delivered. There is no 'working in of commission'. They might initially try to tack a .5% or so onto the interest rate, as that would increase the kickback, but that's easily argued down. Once a dealer F&I says "I can't get the interest rate any lower" they generally mean they can't get the interest rate any lower. Remember that a couple of extra bucks' kickback isn't worth losing a deal over. Also keep in mind that F&Is normally know decision makers at the banks - they're more likely to get an application approved if it's marginal than what the client is on his own.

For the rest, R1.5k p/m really, really doesn't buy you much. Given a reasonable interest rate, you can work roughly on R100 p/m per R5k financed, so you're looking at financing about R75k - any additional amount would need to come via deposit/trade-in if you're looking to steer clear of residuals, which you probably should. I'd second the notion of looking for a decent 2nd-hand car - new, you're looking at a Chery QQ or something equally vile.
 
enigma243 said:
Very... except for these bits:



Kark on both counts.

  1. A holding fee secures the car for the buyer. Nothing more, nothing less. Be advised though that dealerships can legitimately label such an amount as an 'ordering fee', which might well be non-refundable. However, this will more often than not be the case on a new car, not so much on a 2nd-hand job. I do agree with the 'unless you're 100% certain'-bit.
  2. The F&I's (or Business Manager, as they like to be called) pay does not work this way. Like a normal salesman, they are paid commission on the money they generate for the dealership. This comes largely from kickbacks paid by the bank on any successful application that progresses to a car being delivered. There is no 'working in of commission'. They might initially try to tack a .5% or so onto the interest rate, as that would increase the kickback, but that's easily argued down. Once a dealer F&I says "I can't get the interest rate any lower" they generally mean they can't get the interest rate any lower. Remember that a couple of extra bucks' kickback isn't worth losing a deal over. Also keep in mind that F&Is normally know decision makers at the banks - they're more likely to get an application approved if it's marginal than what the client is on his own.

For the rest, R1.5k p/m really, really doesn't buy you much. Given a reasonable interest rate, you can work roughly on R100 p/m per R5k financed, so you're looking at financing about R75k - any additional amount would need to come via deposit/trade-in if you're looking to steer clear of residuals, which you probably should. I'd second the notion of looking for a decent 2nd-hand car - new, you're looking at a Chery QQ or something equally vile.
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Cool man, depends on the salesman I suppose... Some are more keen on getting you hooked with that holding fee. I got that on a second hand vehicle 6 months ago, it could be that there was someone else interested in the car, it was a very popular model of Golf :).

With regards to the commission and the F&I, I had that experience 5 years ago with my previous car but then again I stopped dealing with that specific dealership immediately after figuring out how backwards they were and getting a heads up from another dealership :)
 
There's something to be said for dealing with franchise dealers - they (mostly) do things by the book, as not doing so can hold severe repercussions for the dealer. ;)
 
Gnome said:
:D :D :D LOOL!!!! I've written that one down. Good work man!
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Oh god, what have I done. :o

What I was trying to ascertain was whether the insurance being referred to was the car insurance or some sort of insurance to cover the loan, in the even of the loanee pegging.
 
Say no to deposits

If you have a good credit record you will not need to place a deposit down, and recieve a good interest rate. Placing a deposit on a liability (depreciating asset) is crazy. Rather take a 20% residual and trade in after the term, unless you want to drive a car thats worth less than your TV, on an ongoing basis. Personal preference I guess.
 
It is all about the numbers really. They always play with the interest rate depending on your figures. Do the math on all your options and then decide.
 
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