Vehicle prices

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Noseworthy

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Can someone shed some light. First off I earn a good salary but can’t understand the following:

There are many vehicles on the road the cost over R500k. So how do people afford these?

I can’t imagine seeing a debt order go off every month for 8k.
 
I think many companies give vehicle allowances. Why does a new Polo cost over R200 000!!!
 
One word:

Balloon

Not exclusively balloon for all the fancy cars on the road but a rather large sum of the premium (think German) brands.
 
Noseworthy said:
Can someone shed some light. First off I earn a good salary but can’t understand the following:

There are many vehicles on the road the cost over R500k. So how do people afford these?

I can’t imagine seeing a debt order go off every month for 8k.
Click to expand...
1. They have a Balloon
2. They had a big deposit
3. They had a deposit plus have a balloon
4. They can just afford it
5. They don't have a bond
 
Sumen said:
1. They have a Balloon
2. They had a big deposit
3. They had a deposit plus have a balloon
4. They can just afford it
5. They don't have a bond
5. Or they have a bond and borrowed on their home loan
Click to expand...

Added no.5
 
Noseworthy said:
Can someone shed some light. First off I earn a good salary but can’t understand the following:

There are many vehicles on the road the cost over R500k. So how do people afford these?

I can’t imagine seeing a debt order go off every month for 8k.
Click to expand...

Some people would eat 2 min noodles every month to be able to drive a GTI :P
 
Sumen said:
1. They have a Balloon
2. They had a big deposit
3. They had a deposit plus have a balloon
4. They can just afford it
5. They don't have a bond
Click to expand...
6. They pay a deposit and pay R6k a month to rent a GTI that they have to hand keys over in 3 years
 
Its just scary what some people are will to go through just to drive a fancy car. Most people I know take huge balloon payment or are still living with parent.

OP: Even if you can afford it, DONT sign that contrat if it will give you sleepless nights.
 
Balloon/Residual means you can pull out a brand new Golf GTI while earning 15k a month.

Come the end of the loan term though said person realises what they signed up for and that they still owe 40% of the car's value that has now depreciated drastically so they are lucky if they break even by selling it while sitting with nothing to show for it.

Here's a good example...

http://specialoffers.vw.co.za/offers.php

Interest Rate*
6.69%

Balloon Payment
R152,820

Vehicle Price
R509,400

Instalments
72

Deposit
10.08%

Total Cost of Credit
R591,948


Most people look at that cost of credit and reckon oh that doesn't seem so bad. They forget however than at the end of Month 72 they need to pay the R152,820 in cash, re-finance the amount which means pushing up the cost of credit or as most stupidly do...buy another car on the same residual plan to extend the inevitable.

Meanwhile the real cost of the car is a whopping R643,295.52 in total IF you bought off the ballon payment in cash.

That's more than a quarter of the original price added on top to a car that is now worth much less 6 years down the line.
 
Last edited:
Elephant87 said:
Its just scary what some people are will to go through just to drive a fancy car. Most people I know take huge balloon payment or are still living with parent.

OP: Even if you can afford it, DONT sign that contrat if it will give you sleepless nights.
Click to expand...

Most people I know take huge balloon payment and are still living with parent.

You need both, one just won't work.
 
Maybe they have wealthy family/parents willing to bankroll them. I saw a guy who looked in his early twenties if not younger drive a brand new Audi RS3 sports back earlier. That thing costs close to a bar or more with all the options and we know Audi love options.
 
Let the first guy buy it new, than buy it off him 2-3 years later and you get a 500k car for 300k.
 
rog163 said:
Let the first guy buy it new, than buy it off him 2-3 years later and you get a 500k car for 300k.
Click to expand...

Yes second hand at 20k is the best option

But still a car valued over 500k unless you win the Lottery and have bought many properties first
 
I ask the bank man the other day, he said some customers pay R25000 a month on a car.

I have also seen people stopping at TWT, and after hearing the price of new tires they want to sell the car.
 
upup said:
I ask the bank man the other day, he said some customers pay R25000 a month on a car.

I have also seen people stopping at TWT, and after hearing the price of new tires they want to sell the car.
Click to expand...

A lot of people dont get that, the price of the car isnt the only cost you are going to pay.
Maintenance and insurance also needs to be considered.
 
[-]We all[/-] [-]Most of us[/-] Some of us know that balloon payments are not a good idea but what is the deal with GFV (Guaranteed Future Value VW calls it). Good thing or bad idea?
 
Noseworthy said:
Can someone shed some light. First off I earn a good salary but can’t understand the following:

There are many vehicles on the road the cost over R500k. So how do people afford these?

I can’t imagine seeing a debt order go off every month for 8k.
Click to expand...

Then your salary might not be that good :p
 
Mister 44 said:
[-]We all[/-] [-]Most of us[/-] Some of us know that balloon payments are not a good idea but what is the deal with GFV (Guaranteed Future Value VW calls it). Good thing or bad idea?
Click to expand...

If you can stick to all their rules about max KM a years and stuff, then enjoy your "rented" car.
 
Given the long term cost of repairs and maintenance, the idea is to never own a car. Keep trading in and refinancing everytime the motorplan is about to expire.
 
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