PAY YOUR BOND BY MAKING A BETTER CHOICE FOR WHEELS

A car is not an asset because they devalue the instant you drive it off the showroom floor. Given the cost of fuel and insurance, we should maybe look at saving rather than status when looking for wheels

Similarly, paying high instalments and insurance premiums for a car that, let’s face it, spends 90% of the day in a parking lot or garage is somewhat illogical. There are ways of structuring your finances better, for example to rather, if possible, reduce your car premiums and instalments and put the additional cash toward your bond.

This way you will save on interest and pay off your home faster, a home being an asset and which will almost certainly increase in value over time.

Many lower end cars have the same or similar functionality as bigger, luxury vehicles, so it really comes down to status. This is fine as you work hard and you can spend your cash any way you choose, but sometimes there are better options.

Many lost their jobs during Covid, and meeting the repayments for a luxury vehicle was not possible- even selling the car left several people with an outstanding balance with the finance institution and zero cash for a deposit on another car.

The old adage of hope for the best but plan for the worst seems sage advice. Covid (although still around) does not seem to be a focus at the moment. But the virus that had the, entire planet locked down a short while ago, holds the possibility to return again.

With that in mind, the rising cost of fuel, (although this will be coming down again) and insurance costs, My Office took a look at cars to see what cars come in as the most economical and affordable, maybe not for you, but for kids going to varsity or college.

Though, just because a car is affordable and economical to run does not necessarily make it a good buy. The safety rating is also really important, so running the risk of bias, we will focus on cars that have a decent NCAP or safety rating only.

The car is small, too small possibly for a family, but for a sales rep or as a student car or inexpensive run-around it certainly has great appeal, and it will always be easy to find parking. It has a reasonable safety rating and the fuel economy is excellent. The insurance should also be affordable at this price point.

This is also a compact car, but an automatic with an impressive fuel consumption. Again, an ideal starter car or for students. Suzuki seems to be making great strides in reducing the fuel consumption on their vehicles.

This offering is a small SUV type vehicle, with a very reasonable fuel consumption and a bit of height. This is a good small family vehicle and is very reasonably priced.

This is a super mini car, ideal for a student or au pair. There is a 4-speed automatic available, with a fuel consumption of 4.9 L/100km, so either model will save you money.

Suzuki seems to have very average safety ratings but good fuel consumption, there is something here for everyone, the D-Zire is a sedan, the swift is a hatch and the ignis and S-Presso are mini-SUV type vehicles.

Very reasonable fuel consumption, both versions are in either a 5-speed manual or a 4-speed automatic. The automatic has a higher fuel consumption though. This is an excellent starter car or run-around and again parking is super easy is this little car.

This is a SUV type vehicle, with an impressive fuel consumption and the best safety rating as per Global NCAP. Whilst is may not have the prestige of some German luxury brands, it is a capable and very affordable car. It has a 1.6 turbo diesel engine and 6speed manual gearbox.

The Kiger has a 1.0 turbo engine with a 5-speed gear box, there is a 5-speed automated gear box available, but the fuel consumption rises to 5.4 L/100km. The Turbo Zen is available from R269 900, which has a few less features. A very attractive car with impressive fuel consumption and certainly worth a second glance. Great as a family car or even a first car, the Kiger is appealing across the board.

A R750 000 car, at 7.25% interest and a R75 000 (10%) deposit, will cost you R14 012 per month and R165 713 in interest at the end of a five-year payment plan.

A car costing R290 000, at 9% interest and R29 000 (10%) deposit, will cost you R5 418 per month and R64 076 in interest at the end of a fiveyear payment plan.

Now, based on the assumption that the repayment on a luxury car is affordable at just over R14 000 per month, but you decide to opt for the less expensive car, you could be saving R8 500 per month on the instalment alone. Add to that an insurance saving and a fuel saving and that additional R10 000 or more, could be ploughed into your bond, or into retirement savings, which will yield you a return on your taxes and help you grow a nest egg for your future.

Consider downsizing your car for a fiveyear period, funnel all the “spare” cash into a savings account, and see how your money grows! You won’t regret it! You would save approximately R600 000, a huge chunk of change to put toward a bond or retirement. If in a worst case scenario we were locked down again or worse, you lose your job, having cash on hand to make repayments and keep your head above water would be a great feeling.

Rather go back to saving than spending. Remember, cars spend most of their time in a garage. They are useful, but not if you have to sacrifice financial stability for status. �