Despite the country's challenging economic climate, the National Association of Automobile Manufacturers of South Africa reports that new vehicle sales rose 6.3% year-on-year to 50322 units in September.
While it's exciting to buy a new car, the range of cost and payment options make it essential for consumers to be informed before making a decision.
What are the costs typically involved in buying a new vehicle?
Over and above the advertised sales price of the car, additional charges often come in the form of a service plan, annual licensing, warranty and monthly insurance. You should also factor in the deposit. On-the-road charges - also known as delivery fees - typically cover the costs incurred by a dealer in getting the vehicle ready for you.
Buying a new car is not a once-off expense. Even after it is fully paid for, there will be ongoing costs related to its general running and maintenance, such as fuel, annual services and the replacement of tyres and other parts that suffer wear and tear. Keep in mind that fuel prices are volatile.
What should you do to avoid financial surprises?
When deciding whether to buy a car - especially if you will need to take a loan to pay for it - it is important to take your time and make sure you have all the facts and figures before signing.
Consumers are protected under the National Credit Act and entitled to request a detailed quote listing all costs of the credit agreement.
Ensure that you work through the documentation with the vehicle salesperson and clarify aspects that are unclear.
Take the time to carefully consider and compare the finance options available.
Often, "residual" or "balloon" payments are arranged to help you achieve lower instalments, but these require a lump sum payment at the end of the finance term.
Ensure you make provision for this future lump sum.
Allow room in your budget for increases in interest rates.
Consider selecting a more affordable vehicle or increasing your deposit.
On a personal note .
A vehicle is a major financial purchase.
It is crucial that you have a clear understanding of your financial situation before making the decision.
Online vehicle finance calculators are useful tools to help you calculate your repayment costs.
Naicker is advice manager at Old Mutual Personal Finance
Proceed with caution when buying a new car
Image: FREE STOCK IMAGE/PIXABAY
Despite the country's challenging economic climate, the National Association of Automobile Manufacturers of South Africa reports that new vehicle sales rose 6.3% year-on-year to 50322 units in September.
While it's exciting to buy a new car, the range of cost and payment options make it essential for consumers to be informed before making a decision.
What are the costs typically involved in buying a new vehicle?
Over and above the advertised sales price of the car, additional charges often come in the form of a service plan, annual licensing, warranty and monthly insurance. You should also factor in the deposit. On-the-road charges - also known as delivery fees - typically cover the costs incurred by a dealer in getting the vehicle ready for you.
Buying a new car is not a once-off expense. Even after it is fully paid for, there will be ongoing costs related to its general running and maintenance, such as fuel, annual services and the replacement of tyres and other parts that suffer wear and tear. Keep in mind that fuel prices are volatile.
What should you do to avoid financial surprises?
When deciding whether to buy a car - especially if you will need to take a loan to pay for it - it is important to take your time and make sure you have all the facts and figures before signing.
Consumers are protected under the National Credit Act and entitled to request a detailed quote listing all costs of the credit agreement.
Ensure that you work through the documentation with the vehicle salesperson and clarify aspects that are unclear.
Take the time to carefully consider and compare the finance options available.
Often, "residual" or "balloon" payments are arranged to help you achieve lower instalments, but these require a lump sum payment at the end of the finance term.
Ensure you make provision for this future lump sum.
Allow room in your budget for increases in interest rates.
Consider selecting a more affordable vehicle or increasing your deposit.
On a personal note .
A vehicle is a major financial purchase.
It is crucial that you have a clear understanding of your financial situation before making the decision.
Online vehicle finance calculators are useful tools to help you calculate your repayment costs.
Naicker is advice manager at Old Mutual Personal Finance
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