Extra costs of ownership

Dear Jabu

Dear Jabu

Remember that it's not as simple as instalments every month when considering a new car.

Right now, the car market is battling because of interest-rate hikes, the effects of the National Credit Act and the increased competition, especially from Chinese-made cars.

This means that while the choices for you are indeed many, you need to arm yourself with as much information as possible before settling on a final purchase.

The entry-level segment of the car market has many cars to choose from, including the little Chevy Spark, the Tata Indica, the Fiat Uno and the Chinese-made Chana Benni which arrives imminently.

Despite the so-called entry-level status of these cars, you still need to consider things such as insurance, fuel costs and running and maintenance costs every month.

If you are young and have only had your driver's licence for a limited time, then your risk is that much higher, hence your insurance premium will be higher as well.

But first start with your credit-worthiness and apply for finance at your bank by providing them with details of your income and expenses and allow them to do an assessment based on the National Credit Act guidelines.

You may believe that you have R1400 available to spend every month on a car, but there could be other aspects of your financial profile that might affect your ability to pay back the loan.

In terms of the cars themselves, the Tata Indica is probably not as well priced as one expects at entry-level, but at almost R67000, it warrants a look. My worries would be purely about issues of build quality and after-sales service - two areas Tata needs to improve on drastically. Opel has featured well in recent quality surveys, while other options to look at include the Kia Picanto and Toyota Yaris.