Don’t rush into buying new car
Taking short cuts could result in a situation where a new car owner is unable to afford rising mobility costs.
With an increase in the interest rate, consumers will need to pay closer attention to their monthly expenses than ever before, says Jason White from InspectaCar Financial Services.
Taking short cuts could result in a situation where a new car owner is unable to afford rising mobility costs.
“The rate hike will affect car owners who have vehicle finance agreements structured around a linked interest rate. “Interest will be recalculated and account holders will be notified of the increase in their monthly instalment,” says White.
This hike comes as no surprise, but for “a 25 basis points rise, a vehicle’s monthly instalment changes by R45 for every R250 000 financed”.
“Should the rates increase again in a few months’ time, which economists are predicting, these small hikes add up. “This is why we urge consumers to build some fat into their car-buying budgets,” adds White.
Buyers who cannot purchase a new vehicle that meets their requirements can probably find what they need that is affordable in the used car market.
According to White, more consumers are considering buying used cars, as is evidenced in car finance application volumes.
For every person applying to buy a new car, two are applying to purchase a used car.
InspectaCar advises that a vehicle purchase requires budgeting for the long term.
The average vehicle finance contract currently that is being signed is for 72 months.
As such, consumers should consider all costs associated with motoring and plan to have those costs as a part of their budgets for at least six years.
InspectaCar is changing the used-car dealer landscape as the only second-hand vehicle franchise certified by WesBank.
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