8 July 2022: Managing your personal and professional life in today’s fast-paced world can be challenging. Relying on public transport or other people to get you from A to B if you don’t own a car, can most definitely be an added stress. So, even though owning a vehicle is more convenient and safer, offering the freedom of mobility, comes at a price.
The decision to buy a car is an important financial step that needs careful consideration, sufficient research and budgeting. Therefore, saving up before making the purchase is advisable. With July recognised as Savings Month, WesBank, as the country’s leading provider of innovative vehicle and asset solutions, has provided a few tips to help you save for your next car.
Set a savings target
When saving for a big-ticket item such as a car, being committed to a solid plan to reach your savings target is important. The WesBank vehicle finance calculator is a useful tool to calculate the monthly repayments on the vehicle you wish to purchase. This will assist you in deciding how much you need to save and how much you can afford to put down as an upfront deposit on the vehicle to lower the repayment amount.
Shopping online on reputable sites and visiting dealerships to find the car that is best suited to both your needs and your wallet will give you a clearer idea of where to set your savings target. Whether you choose to buy a new or used car, your choice should always be dependent on what you can comfortably afford without putting yourself under financial stress.
Open a savings account
While many car buyers apply for vehicle finance from a bank to make their purchase, others may be able to pay cash for the car. Whichever option suits your pocket, be prepared for the additional – and sometimes unexpected – costs associated with owning a vehicle. For peace of mind, it is a good idea to set up a separate savings account for your car expenses to prevent you from using this money for other things.
Set a budget
When buying a car, there are additional costs over and above the monthly repayment that you need to budget for, including:
- Insurance: It is imperative to take out vehicle insurance, preferably comprehensive insurance cover. The cost of insurance is determined by the make and model of the vehicle, the driver’s age and driving experience, and how regularly the car is driven, among others.
- Fuel: With the ever-increasing fuel price, you need to be able to adjust your budget with each fuel hike.
- Vehicle maintenance or service plan: If your car is not covered by a service or maintenance plan, you may consider purchasing one. These plans are beneficial to you as you won’t need to budget for the regular servicing of your vehicle. Service intervals are specified by the manufacturer in order for you to maintain your vehicle warranty. Regular servicing helps maximise the resale value of your car. If you choose not to purchase a plan, you will need to budget for services or use your savings money to maintain and service your car as required.
- Driver’s licence and vehicle licence: A driver’s license is valid for five years, and it is important to ensure you are driving with a valid licence. The vehicle licence disc is renewed every year.
“It is our responsibility to make sure our consumers are equipped with the necessary financial knowledge and understanding when it comes to budgeting for a long-term investment. We encourage them to do their homework and seek professional advice where required. WesBank is always available to assist consumers who require assistance,” says Kutlwano Mogatusi, Communications Specialist at WesBank Retail.
“Buying a car is an exciting life experience but it is also a purchase that requires responsible budgeting. The more you can save upfront before buying a car, the more financially secure you will be once you take ownership,” concludes Mogatusi.