Owning a car means freedom! The freedom to stay out with friends for as long as you want to, or leave for work without waiting for public transport. Consider a rent-to-own car. We offer nearly one thousand pre-owned vehicles as well as an easy 3-step car finance process.
Here are a few top tips for first-time car buyers in South Africa of all ages:
Tip 1: Be Realistic about your Monthly Expenses
To determine the amount of money you can afford to spend on a car, take your monthly salary after taxes and deduct all essential expenses, namely: rent or bond payments; food; water and electricity; school or study fees; retail store repayments; loan repayments; medical aid. The amount of money you have, after these expenses, is the amount you can potentially spend on monthly payments for a car.
Tip 2: Know Your Other General Car-Related Expenses
Owning a car involves more than just saving for the deposit and ensuring you pay the monthly repayments. Also take into account money to save for car services and general maintenance, which include windscreen wiper blades, petrol and tyres that will have to be replaced from time-to-time. Fuel, security and insurance costs are all additional monthly expenses.
Tip 3: Avoid Balloon Payments
Vehicle finance companies offer the option of balloon payments, instead of you having to pay an upfront deposit. Balloon payments and upfront deposits do decrease the monthly payment amount. However, if you choose a balloon payment, you will need to pay a lump sum of money at the end of the contract period. Your financial circumstances can change in the future, where you may not be able to pay the balloon payment, and won’t own the car. Instead, be financially savvy and save for an upfront deposit, where at the end of the contract period, you own the car if you have paid all the monthly repayments.
Tip 4: Purchase Vehicle Insurance
Comprehensive vehicle insurance might seem like an unnecessary expense. But, it is very important as it covers theft, fire and accident damage with protection against third-party liability, flooding and hail damage. New drivers, especially male drivers, are charged higher insurance rates to mitigate risks.
Tip 5: Pay Your Creditors on Time
Although a low credit score will not prevent you from owning a rent-to-own car, building a good credit profile by making all your payments on time and in full, will show that you are reliable. A good credit profile will also make it easier to obtain credit in the future.