Percentage of income spent on vehicle repayments?

[Shane]

I think, that people judging here are daft. Each to his own, and everyone has different prioraties and requirements to their lifestyle... but I will add this:

If you buy a car @ R600k and pay R11.5k a month after finance charges, you can pay it off in 72 months or 6 years..

Have a look at the year on year increase of vehicle prices, and see if you could buy a new car (Of the same value/class of car in 6 years time) cash, if you saved R11.5k a month?

The Jeep Rubicon Unlimited for example, cost in 2013 brand spanking new R430k.
The 2019 model, costs R900k plus.

6 Years..

Who said anything about buying new? It's not the only option.

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[Hedgehog]

I think, that people judging here are daft. Each to his own, and everyone has different prioraties and requirements to their lifestyle... but I will add this:

If you buy a car @ R600k and pay R11.5k a month after finance charges, you can pay it off in 72 months or 6 years..

Have a look at the year on year increase of vehicle prices, and see if you could buy a new car (Of the same value/class of car in 6 years time) cash, if you saved R11.5k a month?

The Jeep Rubicon Unlimited for example, cost in 2013 brand spanking new R430k.
The 2019 model, costs R900k plus.

6 Years..

Who said anything about buying new? It's not the only option.

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No it's not the only option, but that was the one I was talking about.....

But taking your point, you could save up to buy a secondhand car cash, of the same value(Type)... and it would cost less, lets say if its a Toyota, it would probably still retain 70% of its original value (probably more on resale) after the 36.5 months it would take you to save up for it, so lets say R600 @ 70% is R420k. (If you take my figure of R11.5k)

But...someone has had it for 3 years....
I do about 40 000 km a year. So it will have 120 000km on.. And if it is your only vehicle and you do maybe 30 000 km a year (average figures if it your daily) then you have 4 years then its at 240 000 km..
And if you save less than R11.5k a month it would take you longer before you could buy it..

Don''t forget that the guy buying new... will still be getting money for the car when selling it @ 120 000km...

Then taking things into consideration like motor/service plans and maintenance costs v/s out of service plans and out of warranties costs.... You would probably end up with the same financial burden as the guy buying new....

[Shane]

Certainly some valid points!

Personally I cannot see myself forking out 700k for a new vehicle... whether financed or cash.

My wife bought a new Fortuner 3 years ago. I suggested that she drive it till the wheels come off, all the while putting away the same amount as what an installment would have been. 10% escalation each year.

That way, when she REALLY needs to replace her vehicle she would either pay cash, or have a significant deposit.

The aim really being to minimise financed capital thus minimising interest paid.

She too does a lot of mileage and the "old" vehicle would then be retained as a runaround in her business.