Buying a used or new car is an important financial decision that people need to put a lot of thought into before committing. Picture: Freepik
Buying a car is an important financial decision that needs careful consideration, especially if you are a first-time buyer.
Regardless if the car is new or used, it is important that before buying the car you do sufficient research, budgeting and saving.
WesBank offers tips to help you save for a car:
Set a savings target
Setting a savings target and being committed to a solid plan is important when buying a car. Using a vehicle finance calculator to calculate the monthly repayments for a car will help you decide:
– How much you need to save.
– How much you can put down as an up-front deposit to lower the repayment amount.
Compare prices
Do your research by shopping online on reputable sites and visiting dealerships to find the car that is best suited to both your needs and your wallet. The car you choose should depend on what you can afford without financial stress.
Open a savings account
You need to be careful about unexpected costs associated with owning a vehicle. Some of these costs could be changing tyres, or getting work done that is not covered by your car maintenance or service plan. Set up a separate car savings account to ensure you will be ready for any additional costs.
Set a budget
The monthly repayments on your car should not be the only item on your car budget.
You car budget should also make room for the following costs:
– Insurance: It is important to take out vehicle insurance. The cost of car insurance is determined by the make and model of the vehicle; age of the driver; driving experience; and how regularly the car is driven, among other factors.
– Fuel: With the ever-increasing fuel price, you will constantly need to adjust your budget.
– Vehicle maintenance or service plan: Having a service or maintenance plan can be beneficial so you won’t have to budget for the regular servicing of your car. Service intervals are specified by the manufacturer to maintain your vehicle warranty, and servicing can help maximise the resale value of your car.
– Driver’s licence and vehicle licence: A driver’s license is valid for five years, while a vehicle licence disc is renewed every year. Not having a valid driver’s license or vehicle licence disc is against the law.
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