Car leasing with no deposit, as offered by Earn-a-Car, is a great option when you want to buy a car. But how much should you be spending on a car? It is generally suggested that the price of the car you choose should be no more than 30% of your annual gross salary and the monthly car costs no more than 10% of your annual gross salary.
This means that if for example your annual gross salary is R200,000 then the price of the car you purchase, should not be more than R60,000 and the car repayments no more than R20,000 per year.
What else should you consider when leasing a car with no deposit?
Owning a car includes a variety of expenses, whether yearly or monthly, over and above the monthly repayment. Also, consider the following when planning to buy a car:
- Is the cost of maintenance, accident cover, accident support and a tracking system included in the car purchase price or do you have to budget additionally for these expenses?
- Establish what the expected fuel consumption of your preferred car might be, based on how many kilometres you currently travel. This is a guide to your monthly petrol costs.
When you have a reasonable idea of how much you can spend on a car and start looking for a suitable one, also remember:
- Check the service book of the car to find out if it has been serviced regularly, and by a reputable service provider, as this will make the car more reliable.
- Always ask whether the car has been in any major or minor accidents.
- Don’t buy a car to impress your family or friends. The type of car you buy should fulfil your needs and be within your budget. Afterall, you will be paying for the car and its maintenance.