Stricter budgeting is essential at times like these….
The recent weakening of the Rand, combined with continued fuel price hikes, has forced South Africans to tighten their purse strings once again. As the country’s motorists find themselves at breaking point – trying to manage increasing expenses with unchanged earnings – there is sadly not much hope for circumstances to improve in the short-term. With this in mind, where can motorists afford to cut back?
Greig Hains – Managing Director at motor financial service provider, MotorVaps – highlights that many South Africans may not be in a position to buy a new car any time soon. With even less disposable income and importers needing to increase their prices, those wanting to replace their vehicle may look to the second-hand market to make their money go further in the short-term.”
Hains explains that just as the price of new vehicles go up, so does the price of vehicle parts. “This means that, in the current market, car owners who haven’t invested in a service or maintenance plan, a warranty or vehicle insurance policy will also find themselves paying significantly more for major services and the replacement of parts due to mechanical failure or following an accident.”
“These motor financial services products should not be seen as a luxury or something that can be cut when money gets tight. Ultimately, with little investment each month, having an insurance policy in place can save a car owner thousands-upon-thousands in the long run.”
Hains adds that, as more South Africans may turn to the second-hand car market to save on costs, they may not be aware of the options available to them when it comes to these financial services products. “While these products often come as part of the package when buying a new car, extended warranties as well as service and maintenance plans are available for older makes and models. Insurance is also crucial on South African roads and should be the first port of call when shopping around for a car.
“Ensuring that your car is properly maintained and serviced at the manufacturer’s recommended intervals will also reduce the likelihood of many costly problems such as a breakdown which can rack up a hefty bill when considering towing, parts, labour and car rental,” he says.
When looking to cut back, Hains suggests being sensible and to start with luxuries like takeaways or professional hairstyling appointments, not essential cover.
He says, “There is no doubt that we are facing tough times economically. The Automobile Association recently stated that the spike in international oil prices and swing in the Rand/US dollar exchange rate will likely result in another petrol price increase at the end of September.”
This hike is anticipated to push the price of 93 unleaded octane fuel inland close to R17 per litre – a total increase of around 20% for the year to-date.
“The cost of living and – for motorists, the cost of driving – is on the rise. While stricter budgeting is essential during times like these, it is important for South Africans to carefully consider where they can afford to cut back and where cutting on short-term costs could result in greater financial difficulties in future,” Hains concludes.
For more information on MotorVaps, please visit: https://www.motorvaps.co.za/.