Just because you can afford something doesn’t mean you should go ahead and buy it. The best reward you can give yourself for all your hard work is to buy the car that suits your finances.
We all too often forget about the cost of maintenance and depreciation in value when it comes to splurging on luxury assets. Buying a car is a long-term commitment and that is why you should ask yourself the following questions before doing so, to avoid falling into the debt trap after buying the wrong car:
- Are you buying the car for safety and travel reasons or are you buying it for leisure and status?
- Can you afford the monthly payments on the car?
- Can you afford to maintain the car?
- Will you still want the same car after a number of years?
People are dazzled by the perceived social status they believe an expensive car to afford its owner, forgetting that its value will depreciate, not realising how quickly the novelty of zipping around in a shiny new ride fades in the face of devastating auto-mechanic invoices and exorbitant monthly payments.
Cue regret raising its hideous head and the realisation that, had you only opted for a more budget-friendly model, you would’ve today found yourself cruising around in a car owned by none other than yours trully, instead of wasting money on a rapidly devaluing possession, not worth the 15-minutes of superficial fame it bought you.
Thus, with the aim of getting what you need instead of suffering for what you think you want, here are a few solid tips to consider, when thinking about spending your hard-earned dough on a new set of wheels.
- Make sure the repayment term of your vehicle finance isn’t too drawn out. The longer the term is, the more you will end up paying on the car in total and on interest.
- Always spend less than the full amount that your lender approves you for i.e. if the car you are planning on getting costs R50,000 and your lender approves you for R100,000, you should only take out a loan for the amount you need, instead of taking out more and getting a pricier automobile just because you can.
Don’t be fooled into buying an expensive car just because you don’t have to pay a deposit on it, as you are likely to end up owing more than the car is worth, due to depreciation.