BUSINESS NEWS - Inflation may be slowing, but over 80% of South Africans remain deeply concerned about the rising cost of living, especially when it comes to cars.
“A vehicle should offer freedom, not financial strain, but too often what looks affordable upfront ends up costing far more over time,” says Heide de Lange of Motor Plan Direct.
From financing traps to maintenance surprises, she lists seven strategies to help drivers keep their costs under control:
- Beware the 84-month trap: Long payment terms may reduce monthly instalments but often increase total interest paid by up to 50% due to compounding interest. Similarly, balloon payments may lower short-term costs while leaving you with a hefty final bill. Choose the shortest repayment period you can afford and aim to put down a larger deposit.
- Avoid ‘creative’ finance: Step payments or deferred plans assume rising salaries, but real-life expenses like school fees and healthcare often grow faster. Consider less risky alternatives like Guaranteed Future Value (GFV) deals. These offer predictable end-of-term options while keeping repayments manageable.
- Account for rising maintenance costs: Vehicle upkeep is increasing by 6%–8% annually. A basic R2,000 service in 2015 might cost over R4,000 today. Luxury models can cost significantly more in tyres, parts, and labour. Plan for it by opting for cars with affordable parts and servicing, and build maintenance into your budget.
- Avoid insurance shortcuts: High-excess policies may seem like a saving, but when accidents happen, they can leave you exposed. It’s a short-term saving that can lead to major expenses at claim time. Instead, look for flexible cover that allows mid-term upgrades or downgrades, and reduce risk through smarter driving and parking habits.
- A used car isn’t always better than a new one: Used cars continue to outsell new ones, driven by affordability. But some new brands like Haval, Chery, and LDV offer competitive pricing and features rivalling premium cars. Whatever you choose, prioritise service history, warranty, and long-term value. Consider a maintenance plan to the reduce risk of unforeseen expenses.
- Build protection into the budget: An extended warranty or service plan may seem like a grudge purchase, but it offers fixed costs and shields you from expensive surprise costs like repairs for mechanical failures. It’s important to remember that it’s not just about the cost, it’s about confidence.
“With cars being both essential and expensive, the best way to stay on the road is to consider the full cost of ownership, not just the monthly instalment,” says de Lange.
“The first step is to rethink the upgrade. Make sure your dream car doesn’t become a financial nightmare. Holding onto a well-maintained car can save thousands compared to the upfront costs of a new one.”
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