IF YOU'RE in the market for a new car right now, think again.
A vehicle's value starts to depreciate from the moment you drive it off the dealer's floor.
Rather buy a new car in January 2013 instead of December 2012 and you will gain a year's worth of resale value. That's a substantial gain.
Glenn Stead, head of personal markets for vehicle and asset finance at Standard Bank, says you will gain financiallyif you leave the car at the dealership until January and register it as a 2013 model.
By registering your new car in January you will save about 2% in depreciation value for December.
This is not the same for a used car because depreciation is calculated on a monthly basis from the date of registration by the original owner.
But there might be a small advantage to be gained on the actual purchase price if you buy the vehicle this yearbecause dealers could decide to notch up the prices in January.
"You gain no financial advantage from the date on which you register," he says.
Stead says it is suicidal to buy any vehicle on a contract that promises several months' payment holiday because there is a catch in those contracts.
"Contracts that say buy now but only start to pay in April or May next year actually costs a lot of money," he says
Stead says vehicle purchase contracts are specific payment plans. They are not loans.
"The payment period for a loan is usually flexible and that affects the amount of interest paid. In a payment plan however, interest is calculated up front on the full purchase price. It is then divided over the contract term. You are liable for the interest and the whole capital amount for the entire duration" he says.
He says a four-month payment holiday on a 60-month contract simply means that the four months of capital and interest payments you skip are added back into the payment plan.
"Your repayments for the remaining 56 months increase and you end up paying considerably more on a monthly basis," he says.
.
Consumers benefit more
THE office of the ombudsman for short-term insurance has recouped a whopping R97.3-million for consumers since January.
This is R1-million more than was recovered in 2010.
Ombudsman Dennis Jooste says his office has also seen a marked improvement in productivity over the first nine months of this year.
"The average turnaround time to resolve complaints has been reduced to 193 days from 223 in 2011. Of great concern to us was the number of complaints unresolved after six months," he says.
Jooste says at the end of 2011 there were 1309, but this has been reduced to 522.
The number of complaints received until September this year was 7210 - a slight decrease for the same period last year, Jooste says.
He says he expects a further reduction in complaints that are unresolved after six months and in turnaround times.
"These developments are welcome news to insurers and consumers," he says.
Don't rush to buy new car
IF YOU'RE in the market for a new car right now, think again.
A vehicle's value starts to depreciate from the moment you drive it off the dealer's floor.
Rather buy a new car in January 2013 instead of December 2012 and you will gain a year's worth of resale value. That's a substantial gain.
Glenn Stead, head of personal markets for vehicle and asset finance at Standard Bank, says you will gain financiallyif you leave the car at the dealership until January and register it as a 2013 model.
By registering your new car in January you will save about 2% in depreciation value for December.
This is not the same for a used car because depreciation is calculated on a monthly basis from the date of registration by the original owner.
But there might be a small advantage to be gained on the actual purchase price if you buy the vehicle this yearbecause dealers could decide to notch up the prices in January.
"You gain no financial advantage from the date on which you register," he says.
Stead says it is suicidal to buy any vehicle on a contract that promises several months' payment holiday because there is a catch in those contracts.
"Contracts that say buy now but only start to pay in April or May next year actually costs a lot of money," he says
Stead says vehicle purchase contracts are specific payment plans. They are not loans.
"The payment period for a loan is usually flexible and that affects the amount of interest paid. In a payment plan however, interest is calculated up front on the full purchase price. It is then divided over the contract term. You are liable for the interest and the whole capital amount for the entire duration" he says.
He says a four-month payment holiday on a 60-month contract simply means that the four months of capital and interest payments you skip are added back into the payment plan.
"Your repayments for the remaining 56 months increase and you end up paying considerably more on a monthly basis," he says.
.
Consumers benefit more
THE office of the ombudsman for short-term insurance has recouped a whopping R97.3-million for consumers since January.
This is R1-million more than was recovered in 2010.
Ombudsman Dennis Jooste says his office has also seen a marked improvement in productivity over the first nine months of this year.
"The average turnaround time to resolve complaints has been reduced to 193 days from 223 in 2011. Of great concern to us was the number of complaints unresolved after six months," he says.
Jooste says at the end of 2011 there were 1309, but this has been reduced to 522.
The number of complaints received until September this year was 7210 - a slight decrease for the same period last year, Jooste says.
He says he expects a further reduction in complaints that are unresolved after six months and in turnaround times.
"These developments are welcome news to insurers and consumers," he says.
This article was first published in the printed newspaper and eEdition on 28 November 2012. Click on this link to view the eEdition
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