The recent economic downgrades by international credit rating agencies have put the South African economy under the spotlight. The country’s weakening economy is set to take its toll on motorists and new car buyers.
Wesbank’s head of brand and communications, Rudolf Mahoney said the economic downgrades can be compared to a poor credit record.
“It means that it will become more expensive for South Africa to borrow money from international banks and investors. Unfortunately this means that the costs will be borne by consumers and taxpayers and that’s bad news in our market where consumers are already heavily indebted,” said Mahoney.
The rising fuel and car prices are just some of the costs that people will have to deal with when it comes to their budgets. The bank offers advice to keep your budgets intact and to ensure that your personal credit record is not negatively affected.
Mahoney offers the the following tips:
Essentials only
- In order to avoid rising costs consumers are urged to draw up a list of expenses and identify the items that are meant to be there. Items such as grocery bills, insurance premiums, car installments and petrol are non–negotiable. Shopping sprees, parties and holidays are luxuries that can be delayed.
“It’s important to have some breathing room in your budget so that you can easily afford higher fuel prices or a hike in your insurance premiums. These are monthly costs that don’t go away,” said Mahoney.
Keep a healthy record
- Due to rising costs, consumers can downgrade their vehicles and own more affordable vehicles that have lower monthly installments and insurance premiums. This should be done before falling into arrears and having to make arrangements with the bank.
Stay debt free
- Consumers are encouraged to pay off their credit cards and loans as soon as possible and not take on any new debt. Not only does this make for a healthier credit profile, it also reduces the temptation to use credit facilities on unnecessary items.
Be money wise
- Structure your car loans by using the following method: Use a deposit, borrow as little as possible and pay it off as soon as possible.
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