Vehicle prices

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.
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Repayment is R1K for every R50K if you don't take residual and do it over longest term. So that R500K car is actually R10K (but R11K when you add financed extras).

So an R11K car is R33K p/m income.

Or if you go for the residual trap, that R500K drops to R7K (I've seen even lower), which means you only need a R21K p/m income.


So easy to finance a car if you have a joint income with no debt (remember that renting is not debt). Some people would rather rent so that they can drive a flashy car. Does not mean they actually pay their rent.
 
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This offer for R6K per month with a R50K deposit.

So you take out a R50K personal loan for the deposit with a repayment over 48mths comes to R1500.
Car repayment is R6K.

Total: R7500p/m

Income required to drive a new Audi Q3: R23K


This is how people can buy cars they cannot afford. The affordability calculator is no reflection of the debt you should make.
 
thechamp said:
The guys driving those cars earn way less than that.
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Or way more. My wife drives one. She does alright for herself. Don't judge a book by its cover.
But with that being said, there is a large proportion of people who can't really afford these cars but still buy them.
 
how do people buy fancy cars they cant afford?

simple, blind stupidity/ignorance and bad calculation skills, and not caring much about the future, but buying the next "in" thing.

case in point, guys who buy fancy clothes, and then gather around a fire, burning them, and ripping them to shreds "cause they can"
or guys who buy expensive food, and throw it on the ground, squishing it with their feet, ""because its cool"

these same people go and buy a Audi/BMW/Mercedes car, spend all their time flaunting it, and get rid of it in 6 months time,
Brains doesn't run in the family it seems.

I sometimes pity them, as they really don't think things through properly, as bad as that sounds, they buy on Impulse not brains.
and that is the mothers milk for expensive dealers, this is where most of their profit is made, on m0rons with less brains then most.

not on people who come prepared, and buy the cheapest/most basic car out there.
 
Messugga said:
Or way more. My wife drives one. She does alright for herself. Don't judge a book by its cover.
But with that being said, there is a large proportion of people who can't really afford these cars but still buy them.
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Of course there are some who do afford to live the high life, maybe it is just my personal experiences and the circles I move in. I've met a whole lot Of people who are well off driving these cars and i've also met plenty who drive them but on closer inspection you see the worn tyres and you see that everything is not what it seems to be. Don't get me started on those who are always borrowing petrol money In the middle of the month to put into those gas guzzling machines.
 
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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...

A colleague bought himself a nice little demo model and when the dealership started setting up the financials, he simply took out his trust fund docs... Payment sorted.
 
thechamp said:
Of course there are some who does afford to live the high life, maybe it is just my personal experiences and the circles I move in. I've met a whole lot Of people who are well off driving these cars and i've also met plenty who drive them but on closer inspection you see the worn tyres and you see that everything us not what it seems to be. Don't get me started on those who are always borrowing petrol money In the middle of the month to put into those gas guzzling machines.
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living on credit, the new SA motto,
driving a big expensive car, with all the bells and whistles and then borrowing from friends to get petrol money,

makes a lot of sense to some people,
but id10s like these make the economy work, not everybody is born smart and intelligent enough to do their homework on buying a new car
they cant afford, that lose its value so quickly.

yes, I agree with you on people that are rich, and can afford it, but many do decide to buy something less flashy
as flashy is a hijacking risk.
 
There are some people who love cars and I give it to them for working hard to buy a car they enjoy.

There are others who have premium cell phones with monthly repayments of a small budget car, they have premium satellite TV, along with other store accounts that when all added up come to the monthly repayment of a new Toyota Corrolla. Add that payment to their existing car payment and they are spending just as much each month as the car lover.

But I think this thread is not about the first use case, but more around Mr Joe Debt who wants to Instagram his new Beamer using his new iPhone while his wife poses in front of the car with her new Edgars outfit.
 
supersunbird said:
Midlevel car is about R300 000 in my opinion (thus about R5500 to R6000pm), what is your midlevel cars price?
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Agree.

A family with a 5yr+ bond buying a new midlevel car is looking at total monthly commitment of R12-R15K. Rather affordable.

Most family guys like me only consider a midlevel sedan once kids are heading towards being tweenagers where legroom is more important and finances look better. Young families tend to buy smaller city cars with a boot just big enough for a pram.

5 years ago when I bought my house I thought of selling my financed i10 as I could not afford to drive it. Today my bond repayment seems like a joke.
 
cbrunsdonza said:
There are some people who love cars and I give it to them for working hard to buy a car they enjoy.

There are others who have premium cell phones with monthly repayments of a small budget car, they have premium satellite TV, along with other store accounts that when all added up come to the monthly repayment of a new Toyota Corrolla. Add that payment to their existing car payment and they are spending just as much each month as the car lover.

But I think this thread is not about the first use case, but more around Mr Joe Debt who wants to Instagram his new Beamer using his new iPhone while his wife poses in front of the car with her new Edgars outfit.
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Ergo, we drive older secondhand vehicles without bling.
Rather spend the money enjoying life with the kids, and not choking when the washing machine breaks.
 
Paid my car off 2 years ago, 3 years after I bought it.

Managed to save over R100k that would have been spent on installments, and keeping this in an interest-bearing account for "in case schit happens".

There's few things that come close to the feeling of having an asset free from debt.

The maintenance plan trap is nothing but a fear tactic, which is used to entice you into trading in and remaining in debt. The best thing to do is to pay your car off within it's warranty period, giving you enough time to save up a buffer for when your warranty expires...
 
supersunbird said:
Midlevel car is about R300 000 in my opinion (thus about R5500 to R6000pm), what is your midlevel cars price?
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I would say closer to the 400k mark for a largish family sedan. Wesbank calculator on R350k says monthly installment of R8.2k ( no residual, no deposit @ 13% over 60 months) . Add insurance and you looking probably close to R9k+. On a CTC of R50k, taxman will take about 30%, also pension, medical aid etc,so you have say 30k to spend. Thats for groceries, schooling , bond, credit card, entertainment etc. You would be effectively spending 1/3 of your disposable income on a new car. From my perspective and others, 1/3 is the normal calculation for a home.

By properly I mean no residual. Of course multiple salaries make a difference, this is working off a single one.
 
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