Most people tend to spend way more than they can afford on a new vehicle. These few tips could save you hundreds of thousands of rands paid in interest over your driving life, so its really worth just doing it!
Here are some tips to avoid the auto-debt cycle:
1. Save to buy your first/next car with cash (yes, it IS possible);
2. Don’t buy new – about 10% of the value is lost as soon as you drive out of the shop; and 20% in the first year;
3. Continue paying the lease/repayment amount to yourself (keep it in a savings account);
This fund plus the trade-in should allow you to buy your next car without going into debt.
4. Keep your car for at least 6 years.
Consider what your budget will realistically allow for before going looking for your first (or replacement) car. Remember that you will be purchasing a depreciating asset and there will also be insurance and maintenance costs.
Getting out of the auto-debt cycle will free up funds you could use for a number of other things, or better still, to invest.
You got this!
Connect with Nikki Sinclair for more from So Much More, call 083 369 4748.