The SHOCKING true cost of buying a new car in South Africa today
I want to show you how much you can expect to pay on a new car every month. Let’s say you’re interested in a new Toyota Carrola 1.3 Esteem. There are no special bells on whistles on this car. It’s a stock standard Sedan with an air conditioner, power steering, airbags and metallic paint.
Toyota’s recommended retail price for the car is R256,900 – That’s what you’ll pay if you fork out cash. But can you really afford to walk into a dealership and pay that amount in cash?
You’ll have to get car finance payable over 36, 48 or 60 months.
So let’s take a closer look at your monthly repayment options as calculated by Toyota Financial Services repayment calculator. Note that I’ve included a service plan. For simplicity sake, I’ve excluded general maintenance costs like the cost of tyres, brake pads, shock absorbers and petrol.
This calculation is based on a 48 month payment plan with an 11% interest rate. Here’s what you can expect to pay at the end of your 48 months:
10% Deposit – R25,600
Extras (accessories, service plans and warrantees – R12,000
Admin fee R68.00
Once off initiation fee – R1,197
Monthly instalment – R6,390.19 x 48 months=R306,729.12
Average monthly insurance payment – R1,700 x 48 months=R81,600
Monthly petrol – R2,400 x 48 months
TOTAL PAYMENT AFTER 48 MONTHS – R427,194.12
That’s shockingly high when you consider that when you buy the car cash, it’s valued at R256,900.
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How Uber can save you R5,490.19 a month or R263,529.12 in 48 months
When I sat down to do this calculation for myself I was shocked. You see, for the past four months I’ve been using Uber at least 8 to 10 times a week to get to and from meetings.
The average trip in an Uber cost me R125. At 10 trips a week, that’s around R5,000 a month for a personal driver that’s available 24/7. I have no stress in traffic, speeding fines, E-toll payments, petrol worries or general maintenance on a car.
To calculate how much money I am saving every month I looked at the total monthly repayments on a new car and included the average cost of petrol every month:
Monthly instalment – R6,390.19
Monthly Insurance – R1,700
Petrol – R2,400
TOTAL MONTHLY COST – R10,490.19
I was gobsmacked.
Just because I am using Uber to get around, I am saving around R5,490.19 a month
If I put that money away in a savings account that offers zero interest, my savings would come to R263,529.12 in 48 months.
So, if you’ve been thinking of buying a new car, think again. Calculate the total cost of a new car. Then find out how much it would cost you to use Uber to and from work every day. I think you’ll be surprised at how much money you can save every month.
If you’re in a lift club, Uber allows you to split the fare with your fellow riders. So, you could further reduce the cost of your Uber trips.
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Contributing Editor, Real Wealth