Would you finance a car ?

J

JAM007

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Just wondering how many people think its a good idea and how many think its not a good idea.
54 / 60 months + interest is a lonnnng time and alot of money.

Whats your thoughts?
 
Financing a car is always a bad idea. But if you need a car and you can comfortably afford it, its better than taking a taxi.
 
Have you got R150k+ lying around, or do you per chance simply prefer walking?

For some (most) it is the only reasonable option.
 
Well, most people really don't have a choice nowadays.

But if I were to finance a car, I'd rather buy something cheaper, put down a larger deposit and pay it off over 3 years. Way to many people live way beyond their means
 
Just don't take a huge balloon. If the poo poo hits the fan and you're out on the street you can hopefully still sell it for what you owe the bank. But if you have a massive balloon you might owe the bank more than the value if you sell it.
 
Sure, what's wrong with financing a car? It's the only way that most people can afford one.

I usually go with 54 months (the difference between 54 and 60 is virtually negligible), and then load my instalments early on (as that's when you're being nailed with the most interest). Once it's down to a reasonable level (say < R2k pm) then I let it ride for the rest of the term.
 
Mike Hoxbig said:
Sure, what's wrong with financing a car? It's the only way that most people can afford one.

I usually go with 54 months (the difference between 54 and 60 is virtually negligible), and then load my instalments early on (as that's when you're being nailed with the most interest). Once it's down to a reasonable level (say < R2k pm) then I let it ride for the rest of the term.
Click to expand...

54 months is no longer an option. Anyone looking to choose that option needs to go for 60 months now. This was the case for me when I bought my car last year in Feb.
 
Venom Rush said:
54 months is no longer an option. Anyone looking to choose that option needs to go for 60 months now. This was the case for me when I bought my car last year in Feb.
Click to expand...

Someone fed you a yarn.

The National Credit Act abolished the old rule that natural persons were limited to a max. of 54 months, and that they had to pay a 10% deposit. However, there's no legislated upper or lower limit - if your credit score is high enough (and you're willing to cough the interest) you can finance a car over 2 years...


In practice banks don't like stretching it over more than 72 months though.
 
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enigma243 said:
Someone fed you a yarn.

The National Credit Act abolished the old rule that natural persons were limited to a max. of 4 months, and that they had to pay a 10% deposit. However, there's no legislated upper or lower limit - if your credit score is high enough (and you're willing to cough the interest) you can finance a car over 2 years...


In practice banks don't like stretching it over more than 72 months though.
Click to expand...

You mean, 4 years
 
I'll be financing my next set of wheels. I view a vehicle like I view my short term insurance, an evil nessecity. I'll most likely go for 54 months and try settle it early.
 
There is nothing wrong with financing a vehicle. But be wise about it. Try save as big a deposit as possible thus your monthly payments will be low.
 
I financed a R200K vehicle over 72 months with no balloon/residual.
Yes, it's a freaking long time and the interest is nearly R100K over 72 months but I reached the decision because of the following reasons.

- The second hand car I was driving repayments were about R2000 per month.
- The term left on my vehicle was 24 months but it was literally falling apart (hit 160000km and everything was breaking).
- It would have cost about R35K just to repair and keep the vehicle running. Divide that amount by 24 months and you end up with nearly R1500 per month in repair costs.

So I added the repayments and repair costs which came to nearly R3500 per month.
My current payments for the R200K vehicle are R4100 per month so I'm paying an extra R600 per month for a brand new vehicle that is much better than my previous ride and I don't have to worry about it spending more time in a workshop than on the road getting me to and from work.
Granted if I had kept the jalopy I'd be scoring after the 24 months had past but the peace of mind over those two years was worth the extra R600 p/m.

Once my current vehicle is paid off I will save cash and go the second hand route again but this time I will buy 1 year old, low mileage vehicles that have not been abused.
Goedkoop is duurkoop.
 
I am very against interest. Start off with a cheapie and work your way up as your savings build. Better to have savings and a car then debt and a car.
 
There is just no way around debt...just spend wisely. Car is not a good idea too spend a lot of money on, the more expensive a car is the more you pay insurance, maintenance etc.
 
ShaunyCT said:
What car are you driving that is giving this trouble?
Click to expand...

It was a 2003 Mazda Etude 160iE
At 130000km it had big end knock (hidden by the salesman by the use of an oil thickener) (Recon engine R5000 to R10000)
At 135000km the MAF sensor needed replacing (R4500)
At 140000km entire exhaust system was shot (R2500)
At 150000km the clutch started giving troubles (constantly slipping and shuddering on pull away) (R5500)
At 160000km the front suspension needed overhauling (R5000)
That's just the major things that needed fixing.

The Etudes are usually very reliable so my gut feeling is that the previous owner drove the (*#@! out the vehicle.
I was just so glad that I broke even when I got rid of the heap.
 
Paul_S said:
I financed a R200K vehicle over 72 months with no balloon/residual.
Yes, it's a freaking long time and the interest is nearly R100K over 72 months but I reached the decision because of the following reasons.

- The second hand car I was driving repayments were about R2000 per month.
- The term left on my vehicle was 24 months but it was literally falling apart (hit 160000km and everything was breaking).
- It would have cost about R35K just to repair and keep the vehicle running. Divide that amount by 24 months and you end up with nearly R1500 per month in repair costs.

So I added the repayments and repair costs which came to nearly R3500 per month.
My current payments for the R200K vehicle are R4100 per month so I'm paying an extra R600 per month for a brand new vehicle that is much better than my previous ride and I don't have to worry about it spending more time in a workshop than on the road getting me to and from work.
Granted if I had kept the jalopy I'd be scoring after the 24 months had past but the peace of mind over those two years was worth the extra R600 p/m.

Once my current vehicle is paid off I will save cash and go the second hand route again but this time I will buy 1 year old, low mileage vehicles that have not been abused.
Goedkoop is duurkoop.
Click to expand...
This is the killer about cars, they can't live forever even if you try and baby them. Getting something that will be reasonable on the upkeep, is always more money than what you have. The finance route is often the only viable route. The only advice I could give is, stay away from executive or top range cars, especially on the second hand market. They lose value like a falling stone and they are so tempting on the used markets, but you forget that the parts and maintenance is still "execute" priced.
 
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