MY nett salary makes it possible for me to buy a car, although so far I haven't budgeted for a deposit. Being a young man, I would like to buy a hatchback model. I was thinking of a Renault Megane II or an Audi A3 1,8T (2004 model), but I am undecided. Which one do you think will be more suitable for me, also taking into account things like fuel economy and affordability of servicing? Jack
IF YOU can afford to listen to your heart only, then go with the one that lights your fire most strongly. Test drive both cars, making sure it includes both town and freeway driving, and you should have your answer.
On the other hand, if you are in a position where you have to buy with your head as well as with your heart, allow me to sound a few warnings.
Buying a car second-hand (five years old, say) means that repairs and major services might be on the cards shortly, and if it's a glamorous, upper-class vehicle like the two you mention, workshops will assume that the owner can afford to pay without flinching and they will charge you accordingly.
The same goes for prices of spares and things like tyres. Insurance will be costly. In short, the world doesn't quite understand how an owner of a fancy car can feel the financial pinch.
Should you wish to off-load such a vehicle on the used-car market, especially one with a turbocharged engine, you might find that by the time it has been through the hands of two previous owners its value has dropped alarmingly.
I therefore suggest that you cast your net wider and look for a car that combines practicality, ease of maintenance, proven reliability and strong resale value with the sportiness that appeals to a young man.
I bought a Ford Laser 1998 model in 2005 from a dealer in Boksburg. The advertised price was R35000. I paid R5000 deposit.
After they had added everything, the car was lost R49 000 on a 54-month loan deal financed by Motor Finance Corporation (MFC). Initially, my instalment was R921, now it's R1010. My question is, if my monthly instalments are increased, doesn't it affect the contract I initially signed - the total cost of the car? -Mpho
When entering into a hire-purchase deal you should be given the option of a linked interest rate (linked to the prime lending rate, which fluctuates according to the Reserve Bank's official rate), or a fixed interest rate.
If your contract stipulates a linked rate, as it seems likely, it allows the monthly instalments to go up or down in line with interest rate movements.
However, the current interest rate is 10,5percent, which happens to be exactly the same as in 2005, so the higher instalment now, as compared to 2005, cannot be ascribed to a change in interest rate - though it would have gone up in the intervening period, it should now have come back to the 2005 amount.
To clear up all doubt, you should contact Motor Finance Corporation and ask them for an explanation.
MFC is held in high regard in the motor industry and there is probably a sound reason for the higher instalment.