NEW CARS IN SA: Wheels24 reader Cornelius Odendaal shares advice for new-car buyers. Image: iStock
Cape Town - Earlier in January 2016, Wheels24 published articles regarding new and used vehicles for parents to consider for their recently graduated matriculant in South Africa.
We list 24 vehicles for less than R200 000, published important tips and guidelines on what potential buyers should consider before purchasing.
Reader Cornelius Odendaal shares his experience and ask that parent don't "waste money on expensive cars but rather to save and invest wisely".
As a former bank manager with six years experience, I had the privilege of seeing hundreds of clients’ finances laid out before me. I therefore have a very good indication on what successful (and less successful) people spend their money on, which financial strategies create wealth and which don’t.
I can with full confidence state that spending too much money on depreciating assets (such as cars, clothes, vehicles, furniture etc) just doesn’t make sense and leaves one poorer.
READ: Matriculant in the family? Your guide to buying a first car
Buy new car for: R150 000
Depreciation per year: R20 000
Interest loss per year: R15 750
Insurance per year: R8400
Total cost just to own the vehicle: R44 150
The above equates to R3679 per month just to own the vehicle. For a new earner this is a large amount of money. It would make far better financial sense to buy a good second-hand vehicle for R50 000 and spend the difference investing in an asset that generates income and appreciates (eg. a flat to rent out).
Do you agree with our reader's thoughts regarding new cars in SA? Email us or reach us via Facebook and Twitter.
READ: Need a ride for your Matriculant? 11 cars for less than R150 000 in SA
I have worked for 15 years, never owned a new vehicle or one costing more than R120 000 but I have managed to build up a modest property portfolio which generates income and appreciates in value.
I urge parents and matriculants (or any person for that matter) not to waste money on expensive cars, but rather to save and invest wisely. I realize that buying a new car usually has the benefit of a service plan, but if you service your car twice a year at R2500 per service that is only R5000 spent extra.
In addition to the above, our vehicle prices in SA are also simply too expensive. I lived in the UK for a few years and brought back a used Nissan X-Trail that I bought at R100 000 cheaper in the UK.”