vehicle financing !?

Necuno

Necuno

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/newb alert on

anyone please care to explain to me who this exactly work. I see there is leased or installment - deposit and no deposit :confused::confused:

what are my options, what can i do.
 
Necuno said:
/newb alert on

anyone please care to explain to me who this exactly work. I see there is leased or installment - deposit and no deposit :confused::confused:

what are my options, what can i do.
Click to expand...

Lease = You pay the car but never own it, after a few years you get to change it for a new one or buy it out right.
HP / Installment = You buy the car for a fixed price with interrest. After you finished paying the agreement the car is yours.

Deposit comes of the purchase price other way round of course if you dont.
 
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There is also the residual issue, which you should avoid at all costs if you can.
 
Best way is to decide what you can afford - and put a 10% deposit down.

Take the amount the car cost, minus the deposit, and divide it by 40.

This will give you a close enough estimate of what your monthly installment will be - over 54 months.


-- You can do it MANY other ways, but with ALL of them you will work yourself financially backwards.

If you want to pay more on your car halfway through the term, ask the bank to take that amount of the capital, and not the interest.

Nag ou grote,

H_L
;):D:rolleyes:
 
With lease, you CAN own it - from what I understand?
 
You can.. but its a big balloon payment at the end....

It actually doesn't work out cheaper than HP
 
Dolby said:
With lease, you CAN own it - from what I understand?
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Jip, if you pay the residual value of the vehicle all at once...

Lets say you buy a car for R200 000 and a residual value of 40% your have to pay R80 000 + interest at the end of your term - which is normally 5 years. So you just pay and pay and pay and pay some little more.
 
Hannibal_Lecter said:
Jip, if you pay the residual value of the vehicle all at once...

Lets say you buy a car for R200 000 and a residual value of 40% your have to pay R80 000 + interest at the end of your term - which is normally 5 years. So you just pay and pay and pay and pay some little more.
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Yip - thought so.

I bought a Toyota RSI for R200k in April 2006 (60 month lease) with a R60k deposit and R60k residual. Monthly I'm paying R2450.00.

I'm getting money in a few months and settling the car fully (settlement will be R110k) - which means over 2 years I've paid roughly R230,000.00 in total.

I understood then that the car is mine was I've paid everything for it.

Am I right in my calculation?
 
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You'll need to check with your bank about how much it'll cost to settle.
Some banks have penalty charges for it being early.
 
Yea - they never mentioned anything like that. I'll check though.

iirc, ABSA penalised if settled within the first 6 months ...
 
If I hadn't taken a residiual (but keeping the deposit), I'd have paid R3100pm, settled in a few months and paid roughly R225k in total.

For R700 a month saving, I'm happy I took ny residual *shrug*

Everyone is against them, but there ARE cases in which they work and benefit
 
Buy a car cash if you can. Cheapie. Save for it or something. I can't even begin to explain how much heartache it will save you in the end
 
hey man, go buy a new car..it's great fun.

you car loses R3000 in value every month through depreciation, and you get to pay R3000 a month in installments for this privilege. this is truly wonderful.
 
ToxicBunny said:
You'll need to check with your bank about how much it'll cost to settle.
Some banks have penalty charges for it being early.
Click to expand...

Dolby said:
Yea - they never mentioned anything like that. I'll check though.

iirc, ABSA penalised if settled within the first 6 months ...
Click to expand...


In terms on the NCA, there shouldn't be penalties for early settlement; in there is, then the term should be 3 months, as with all other credit agreements.
 
AcidRaZor said:
Buy a car cash if you can. Cheapie. Save for it or something. I can't even begin to explain how much heartache it will save you in the end
Click to expand...

True - the residual option may feel as if it's helping you big time, but on paper it's screwing you over and over.
 
VernD said:
In terms on the NCA, there shouldn't be penalties for early settlement; in there is, then the term should be 3 months, as with all other credit agreements.
Click to expand...

The new credit act doesn't allow them to penalise you too heavily.

Let me put it this way - they have to keep it reasonable.

And you still score, even if they did charge you 6 months interest.
 
Dolby said:
Read :Everyone is against them, but there ARE cases in which they work and benefit/
Click to expand...

The one and only time one can look at a residual, in my opinion, is if you plan to sell and buy another car every two years or so (company car for instance).

Bear in mind that you will never own a car though although you spend your life paying for one.

Best to stay away (and far!) from a residual. ;)
 
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