Women24 - Smart ways to pay for your car

Ancestry24 Careers24 Entertainment Fin24 Food24 Health24 Kalahari.net Mobile News24 Property24 Sport24 Weather24 Wheels24 Women24 GoTravel24

Jo-Ann Strauss Unpacks!

Find out what a former Miss SA likes to do on holiday.

Book Club | Astrology | News |

Celeb Gossip | Soapbox | Hotties | Series Addicts |

your voice, every day

The Good, the Bad and the Ugly.


Ask an expert...


Sponsor Links First for Women Dial Direct Your Homeloans UK Lotto Life Insurance Classified ads Car Rental Best Car Deals Compare Insurance Quotes Life Insurance for Women

23 April 2007

Smart ways to pay for your car

Need ideas on how to budget when it comes to monthly car payments? Here are some tips on how to budget monthly and wisely.

1. Put down a bigger deposit.
The larger your deposit, the smaller the 'capital amount' (what you still owe) will be. Which means lower monthly repayments and lower interest charges.

2. Increase your monthly repayment by R100 or more.
Over four years, an extra R100 a month adds up to R4 800 – this could cut anything from one to five months off your total repayment time, and you save the monthly interest charge on those months, too.

3. Keep your monthly repayments the same
– even if the interest rate decreases. The interest rate is currently increasing (meaning it's likely your monthly repayments will also go up).

But if the rate suddenly drops, finance companies usually drop your repayment amount accordingly. If, however, you ask them to keep it at the higher amount, you'll pay your car off quicker.

4. Choose to pay it off over a shorter period of time.
Reduce your overall repayment time by 12 months or more – your repayments will be higher, but you'll save massively in the long run.

How to budget
What your budget needs to include:

Initial deposit (usually aminimum of 10%) or a trade-in.

Monthly repayments (check if these will be fixed or whether they'll fluctuate with the interest rate).

Monthly or annual insurance fees. You can get an instant quote online or from a call centre – remember you will pay more if you are under 25.

Monthly petrol expenses. Find out what your car's expected fuel economy is from the dealer or search online (work on a realistic fuel economy – not the best-case-scenario one).

Monthly, quarterly and annual maintenance costs (cleaning your car, services, emergencies). Services may be included in a maintenance plan, or set at standard rates and intervals.

Maintenance plan fees (you may pay an additional once-off fee by purchasing a car maintenance plan) or extended warranty.

Added extras (like a sound system or customised bumpers).

Annual AA membership (or something similar) – a good idea for all female drivers.

Parking. Does your work have a parking bay you can hire? Also remember shopping mall or street-parking fees.

Previously published in True Love Babe, Subscribe now and save