Bank Better, Live Better
what you should know when buying a car
Tshegofatso Makgabutlane always dreamed of having her own car. By saving for a deposit, budgeting carefully and using credit responsibly, her dream became a reality.
Having your own vehicle creates a great sense of freedom, but it also comes with a lot of responsibility. Any vehicle, no matter the size or style, is expensive to run and maintain. Fuel price increases seem never-ending, regular services need to be done and wear-and-tear expenses all add up. Then there’s vehicle insurance, another pricey – but necessary – expense.
Owning a vehicle could however create a world of opportunity, as was the case for Tshegofatso (Tshego). After shopping around, she spotted her dream car at a dealership. It was the perfect set of wheels for lazy Sunday drives and the ultimate road trip adventure with her girlfriends. She also knew that having her own transport meant she would be able to apply for a job that required her to travel a little further from home.
Tshego saved up, did her math and budgeted carefully to make sure she could afford the running costs and maintenance of a car. The only downside was that the VW Polo was slightly more expensive than she originally budgeted for. She decided to apply for credit at Capitec to cover the difference – and was instantly approved thanks to her good credit record.
With her own car, Tshego – who graduated with a BA degree from North West University in 2015 – could get a permanent job at the university. Today, thanks in part to having her own transport, she works there as a Higher Degrees Administrator, assisting prospective and current students with their applications, registration and other queries.
Tshego’s new position and added job security allowed her to make her monthly repayments on her car with ease, and on terms that suit her needs and pocket. “I took credit for the right reasons, and it has helped me realise my dreams,” she says proudly.
If you decide to buy a vehicle, check out Capitec’s handy guidelines to help you figure out what you can afford, according to your salary.
Also consider these important tips when looking for a suitable vehicle:
- Make sure you buy from a reputable dealership that is registered with the Motor Industries Federation (MIF)
- Compare prices of similar makes and models, to make sure that the cost and condition of the vehicle is fair and reasonable
- Consider aspects such as the mileage (the lower, the better is a good rule of thumb), mechanical condition (engine) and bodywork. Also check for any oil leaks, as this may indicate a mechanical problem
- Find out if the vehicle has been in any accidents – depending on how serious the repairs were, this could affect its reliability over the long term
- Check the service book. Vehicles that are serviced regularly tend to be more reliable in the long run because they are properly maintained. The service history is also a good indication of what to look out for, when it comes to future maintenance
- Don’t buy a vehicle simply to impress your friends or family. The decision should be to fulfil your needs, according to your budget and affordability
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final steps to buying your car
If you decide to take credit to pay for your car, aim to pay it off as quickly as possible. The longer you take to pay back the loan, the more interest you’ll pay. Here are some important car budgeting tips.
a car to match your salary
A good rule of thumb is that the price of the car should be no more than 30% of your annual gross salary, and your monthly car costs no more than 10%.