Here are some guidelines on how to better maintain and manage vehicle costs.
With people already traumatised by the high fuel prices and interest rate hikes, the obvious maintenance costs that add up is just becoming too much. Glenn Stead, Head of Products for Vehicle and Asset Finance at Standard Bank, says consumers should look at the overall maintenance costs when considering buying a new vehicle, and not just the monthly installment repayments. Consumers need to be realistic about what they can afford and bear in mind that as vehicles depreciate in value, their running costs appreciate.
“As a guideline, costs of maintaining and running a vehicle should not exceed 30 percent of gross monthly income,” advises Mr Stead.
Here are some tips to better manage your vehicle costs:
Fixed rate vehicle financing option – although marginally higher than the variable rate, by utilising this option vehicle owners can be assured that they will not be affected by further interest rate hikes. It may be better for the first time buyer to use this option: it will be a bit more expensive, but at least it gives them peace of mind.
Using reward programs – reward programs offer an opportunity for vehicle owners to save on their monthly running costs. By filling up at select filling stations, account holders can get back as much as R1 for every litre. For example, Standard Bank’s UCount Rewards programme which started in 2012 has paid back R77 million in redemption point to customers through its UCount Rewards fuel reimbursement option.
Reduce bills without compromising insurance – faced with the increased costs of maintaining vehicles, owners should not be tempted to compromise on their insurance options by either switching to an option with lower premiums, or cancelling their vehicle insurance completely. Owners should carefully examine the terms of their insurance contracts, to be clear on what is covered, and what isn’t.
Understand the different types of vehicle financing products – it is important for vehicle buyers to understand the different types of vehicle financing options, and the financial implications of each: including the implications of residual payments at the end of the contract’s term. Banks offer a range of options and solutions to assist customers facing financial pressure. This includes structuring a grace period for repayments.