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Make Sure That Your Car Is Affordable

Finance & Money

Posted on Monday, February 10, 2020

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Buying your first car is a milestone. You've probably been browsing online car ads for months. But apart from the asking price, have you really considered the true cost of owning a car, and not just how cheap the purchase price is? Cars need more than fuel and oil – they come with running costs. Let's take a closer look at what it'll take for you to get your new car on the road, and keep it there.


Getting the deal done


When you've chosen your car, ask the dealer to give you a breakdown of all the costs involved in the sale. There will be some costs you can't avoid and those you can. For example, some dealers will charge an 'on the road fee' or ‘pre-delivery fee’, which is what they require to get the car ready for you to take ownership. 


Always ask for a full list of potential extra costs before you do the deal. Licensing, registration and new car plates are all acceptable costs, but be wary of add-ons such as tinted windows. You know your budget. Stick to it. 


Putting together a car budget


Running your car comes with unavoidable costs that you'll need to factor in your monthly budget and your own affordability.


The cost of fuel


If you listen to the news, you'll notice that the petrol and diesel prices fluctuate regularly. Plus, the per-litre price differs depending on whether you live inland or on the coast. Then there's the fuel consumption of the vehicle you're buying to factor in. Crunch the numbers to establish an average cost per month for fuel. This can always skyrocket unexpectedly if the cost of fuel goes up.


If you have a long daily commute and have to pay for parking at work, it may make sense to use public transport during the week or join a ride-share scheme with people that you work with. They could contribute to your fuel and parking costs.


The cost of car maintenance and repairs


Budgeting for your car will differ depending on whether you are buying a new or used vehicle. If you're buying a car fresh out of the box, the manufacturer will most likely offer a maintenance plan and warranty that will cover your costs for a period of years or a set number of kilometres.


If you're buying a second-hand car, clue yourself up on the model and make to get a sense of the cost of yearly servicing and part replacement. Over a five-year period, you'll probably have to replace windscreen wipers, brakes, the battery, headlights and tyres. Alternatively, you could choose to add an extended warranty when you buy the car, but this will cost you a few thousands of rands more.


Budgeting for car maintenance isn't dependent on the age of the car necessarily. The distance you drive every month and the conditions you drive in will affect the wear and tear. One way of getting a ballpark figure of what to budget for is to look at the cost per kilometre advised by the Automobile Association of South Africa. They estimate that the cost of running a vehicle per kilometre in South Africa is R3.35 per kilometre for a small sedan. If you drive about 20 000km a year, you'll need R5 583 in your monthly budget.


The cost of car insurance


Of course it's important to look for car insurance that you can comfortably afford, but again, it pays to do your homework, as there are many factors that affect your monthly premium. To name a few, your car insurance will be influenced by your age and the type of car. Some wheels are more desirable to thieves than others, which pushes the premiums up. Where you park your vehicle during the day or night can also sway the numbers. These factors are unique to you and this is normally referred to as your risk profile. 


Before you make the leap and choose a car, check with your insurer what you can expect to pay on insurance monthly based on your profile. This could help put things into perspective and help you consider more affordable car options.


The information contained in this article is for information purposes only and does not constitute professional advice.


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