What car repayments fit your budget?
The most important thing you should ask yourself when purchasing a new car is – how much disposable income do I have left in my budget?
Disposable income would be your monthly salary, minus all your other necessary expenses.
Say you earn R10 000 a month (after tax) and your other expenses such as your food, rent, phone bill and whatever else you are required to pay each month totalled R7500. Then your disposable income would be:
R10 000 – R7500 = R2500.
So you would have up to R2500 available for monthly car repayments.
So what value of car would R2500 per month get you? This depends on how many monthly repayments you choose to pay the car back over.
The longer the period of time you choose – the higher the value of car you would be able to afford. Unfortunately though, it also means more interest!
For more info on vehicle finance terms and definitions.
*Calculated using FNB’s Vehicle Finance Calculator at 12% interest.
The above table shows you the value of the car you’d be able to get for monthly payment amounts of R1500, R2000, R2500 and R3000, depending on the number of installments.
This is worked out with no deposit, residual or balloon payment – so you won’t owe anything after the set amount of repayments!
So for just R2500 a month, in just five years you could have fully paid off a Suzuki Swift DZIRE 1.2!
Or to fit a slightly smaller budget, you could pay off this 2015 Chevrolet Spark Lite in just five years – at only R2000 per month!