Getting into gear: how to prep your budget before buying a car
Thinking about investing in some sweet new wheels? Here’s how to manage your finances to get you where you need to go.
We all remember the daunting feeling of having to look at how on earth to pay for your first car - or maybe you’re sitting with that daunting feeling right now on the other side of the screen! If that's the case, hi! We’re super glad you’re here.
So many of us are scared of looking at our budget in the eyes, which never does anybody any good. Having a clear understanding of your finances is the first step towards becoming financially secure. We know life gets complicated and sometimes it's easier to turn a blind eye and hope it all works out.
In our experience, avoiding your budget can have serious financial repercussions. Not knowing the full range of payments, hidden costs and future expenses can mean you end up wasting tens or hundreds of thousands of rands. What’s the point of buying a car if you can’t afford to use it?
Let’s dive into the things you need to consider to prep your budget for buying a car!
Can you make your car payments?
When you look into buying a car, your vehicle payments are probably going to be the highest number on the list. Vehicle payments are the monthly payments you make back to your bank to pay off the loan they’ve given you to buy your car.
If you want to get an idea of what you’ll be paying per month, you can use a car finance calculator (we found one for you, just click over there!). Bare in mind banks will often require a 10% deposit and your interest rate will be affected by the age of the car, your credit score and the amount of money you put down from the start. You’ll need to confirm all of these details with your finance provider.
It’s important for you to know that you’ll be able to make these payments for the foreseeable future and until your car is paid off - the dire consequence being a huge spike in payable interest (more debt is what we’re trying to avoid here) or your car being repossessed.
Repairs and maintenance
Like all things man-made, your car is likely to need some upkeep and repairs throughout its time on the roads.
Maintaining your car is pretty standard, you’ll need to budget for tyre changes, wheel alignments and oil changes. Regular services are also on the agenda every six months or 10,000km.
Get some quotes from repair shops in your area or recommendations from your insurer (if you stick around for a few more lines we’re going to have a talk about this next). If you don’t prepare yourself for these costs and set aside some money per month, they may come as a shock to you.
If you can’t afford car insurance, you can’t afford a car
Car insurance is a non-negotiable expense that will be on your budget every month as long as you are on the roads. Is it a legal requirement? No. Is it a really bad decision to skip it? Yes. Driving in South Africa is no walk in the park (because, well, it’s a drive on a road). Reckless drivers, plenty of pedestrians and approximately 85 hijackings per day are a few examples of why it would be crazy to put your expensive vehicle (and you) on the roads without knowing how the costs will be covered when something goes wrong.
Insurance companies will often offer you either third party cover, third party, fire and theft cover or what we would recommend (and what we only always offer) comprehensive cover.
All of our policies at Oneplan, from the least expensive to the most expensive, are comprehensive.
Don’t forget fuel
With the way the prices keep climbing, how could you? Get a good idea of how many kilometres you drive per week. Your route to work, lift clubs etc. Take this number and divide it by your cars kilometre per litre and voila, work that number into your monthly car budget!
Remember to set aside some fuel for emergencies and (on a lighter note) those spontaneous road trips!
Let’s get you started
Yours in comprehensive car insurance,