Vehicle Finance

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.geek

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Hey guys

I'd like to know how it works if you sell a car which still has outstanding finance on it.

Scenario:

You purchase a car for R200,000.00

You put in a deposit of R50,000.00

You finance an amount of R150,000.00 over e.g. 60 months.

If, after 12 months you want to sell the car. What do you get out of the deal?

Say you'd paid in +- R36,000.00

How much would you get out of it if you sold the car for close to the original value?

Thanks! :)
 
A lot of what you paid in was interest, so if your total payments were R36,000, you wouldn't have reduced the loan to R114,000. Phone your bank and ask them what the oustanding amount is.
 
off my head, i'd say you might not even break even. You should just phone them and ask for a settlement amount. All you do for the first year is pay the interest on that R150 000, and at 3k a month you were paying, interest at 14% would of been R21 00 odd for the year, so you'd have paid R15 000 and still owe R 135 000 + your deposit R 50 000 = R185 000 is how much you'd need to get for the car.

Pretty rought but
 
you can use one of those finance calculators on the bank websites to tell you how much.

If you phone them they have to give you the exact amount owing at that time.
 
Tada! ;)

After 12 months you've actually paid just over R43,000.00 - however you've only 'cleared' R21,500.00 of the loan with the bank because the rest is interest (as pointed out). You owe the bank almost R130,000 ...


Pmt Principal Interest Cum Prin Cum Int Prin Bal
1 1670.48 1937.50 1670.48 1937.50 148329.52
2 1692.06 1915.92 3362.54 3853.42 146637.46
3 1713.91 1894.07 5076.45 5747.49 144923.55
4 1736.05 1871.93 6812.50 7619.42 143187.50
5 1758.47 1849.51 8570.97 9468.93 141429.03
6 1781.19 1826.79 10352.16 11295.72 139647.84
7 1804.20 1803.78 12156.36 13099.50 137843.64
8 1827.50 1780.48 13983.86 14879.98 136016.14
9 1851.10 1756.88 15834.96 16636.86 134165.04
10 1875.01 1732.97 17709.97 18369.83 132290.03
11 1899.23 1708.75 19609.20 20078.58 130390.80
12 1923.77 1684.21 21532.97 21762.79 128467.03

--------------------------------------------------------------------------------

13 1948.61 1659.37 23481.58 23422.16 126518.42
14 1973.78 1634.20 25455.36 25056.36 124544.64
15 1999.28 1608.70 27454.64 26665.06 122545.36
16 2025.10 1582.88 29479.74 28247.94 120520.26
17 2051.26 1556.72 31531.00 29804.66 118469.00
18 2077.76 1530.22 33608.76 31334.88 116391.24
19 2104.59 1503.39 35713.35 32838.27 114286.65
20 2131.78 1476.20 37845.13 34314.47 112154.87
21 2159.31 1448.67 40004.44 35763.14 109995.56
22 2187.20 1420.78 42191.64 37183.92 107808.36
23 2215.46 1392.52 44407.10 38576.44 105592.90
24 2244.07 1363.91 46651.17 39940.35 103348.83
 
errr.if he's only paid R36 000, then its impossible for him to have "paid just over R43,000.00" , unless they are giving him the best deal ever and paying him interest while he owes them money
 
I'm using the figures he's given me? I'm not sure where he's getting the R36,000 from (maybe he's thinking R3,000pm for 12 months?)

Financing R150,000.00 over 60 months at 15.5% is about R3600.00pm.

After 12 months he's paid roughly R43,200.00 (R3,600.00 x 12)over to the bank - of which R22,000.00 of that is only interest.

So he's only paid off R21,000 of the original amount of the car ... leaving close to R129,000 as his settlement with the bank.
 
That's 7.5% interest ... I think my figures are more realistic :/
 
Thanks for the replies guys. I haven't paid a cent (yet). ;)

Just asking out of interest. As I wasn't sure how it worked with regards to selling a vehicle that you have not finished paying off...
 
Depreciation on your vehicle is MUCH higher than the capital payments portion of your installment.

Taking into account insurance, I can't afford a new car or a newish second hand car. I'm currently paying R450 comprehensive cover on my Chrysler but got a quotation of R2900 monthly insurance on a used Honda Civic using my same profile!
 
Well assuming the loan amount is R150 000 and it is paid back over 60 months at 15.5% then Dolby is fairly right...

After 12 months of payments you would still owe R 128,467.04
This is after physically paying R43 295.74 of which R21 762.78 was on interest, so you only paid around R21 532.96 which is an average of R1 794.41 per month :shock:

Then you get to depreciation, on average new cars I believe depreciate at around 20% in the first year, and then around 10% each year there after, but I'm just using this as an estimate... some cars are worse, some a bit better...

So if the car was new when you bought it, it would be worth around R160 000 after 12 months, but that would be on a private sale ofcourse... go to a dealer and they would be around 12 - 16% less than that for a trade in, which would then mean you'll get around R134 400 - R140 800.

Let's use worse case, say you get about R134000 for a trade in, deduct the R128 000 from the loan and you would have R6000 "in your pocket", although because of interest you then lost about R15 000 due to interest for the 12 months which would be about R1250 per month you throwing away...
 
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