In the excitement of shopping for a new car, many people forget about a very important thing – budgeting! It’s amazing how few people take the time to actually figure out what they can comfortably afford and in these tough economic times it is essential.
When you think about buying a car, the first mistake one makes is only being concerned about the price tag. The price of the vehicle itself is only one cost included in financing a car. Likewise, your car loan is only one expense that comes with buying and owning a car, and you should be aware of all the other costs before you decide what you can afford. When you look at your monthly budget, Imperial Auto recommend that you include the following five costs to make sure your car purchase is within your reach:
Car loan repayments
The bulk of your vehicle expenses will be the monthly car loan repayment figure.
This instalment is a combination of the vehicles price and interest from the loan accumulated over the period you chose to pay off your loan. This is usually a cost of a couple thousand Rands.
The longer your repayment period, the less you pay per month – but you end up paying more for the vehicle in the long run. But before you decide to raise your monthly instalment to pay off the car sooner, you need to consider the other four costs you’ll be budgeting for.
Before you are handed the keys to drive your new car off of the showroom floor, you will have to take out an insurance plan for your vehicle. Accidents happen every single day and it’s in you and your vehicle’s best interest to be covered in the event that anything happens while you’re behind the wheel of your car. This can cost anything from a few hundred rand to even over R1000.00 per month.
Filling your fuel tank
The most regular cost you will be undertaking for the ownership of a vehicle is for filling up your fuel tank. This can happen more than once a month and cannot be set as a fixed estimate as the price is always rising and falling as the months go by. But for a rough estimate, a standard 45-litre tank will cost more than R700 to fill and if you fill 4 times a month – that’s R2800.00
A yearly service
Your car is supposed to go for a service around every 15 000 km or at least once a year (depending on your driving patterns). These services are either minor or major but both are costly.
The service centre will check and change your oil, clean and replace your filters, locate any leaks, replace windscreen wipers if necessary, check your spark plugs, and test the general operating ability of the vehicle. You’re looking at anything from R3 000 to R10 000 for a car service – sometimes before they’ve added the cost of special repairs.
Changing your tyres
Depending on how you drive, where you drive and your luck, there’s a chance you’ll need to replace your tyres or at least two tyres every year. And at R800+ a tyre, it can become quite costly.
All of these costs mentioned, needs to be in your overall car financing budget if you want to comfortably afford this venture.