Buying a car is a huge decision and with living expenses going up and beyond, now is the time to be sensible and thrifty.
How much should I spend on a car?
According to my colleague Chad's article, namely How much do you need to earn in order to afford a new car?, no more than roughly 20% of your net salary should be spent on monthly repayments. However, you should factor other costs into that 20% as well, such as insurance, which is usually around R1000 per month (new or young drivers in entry-level cars), as well as fuel, and consumables such as tyres. You also have to consider servicing and repair costs when something goes wrong - this also makes up a part of that 20%. And to top it all off, when choosing a new or used car, you need to see if it's still under warranty and if there's still a balance of a service plan left. If not, it will be worth your while investing in a motor plan that will include repairs and servicing for your car. Did you just see your car budget getting smaller and smaller? Reality bites! That's why you have to make a decision with your head, and not your heart!
10 Tips for getting the best used car deal
Fortunately there are some great cars available on AutoTrader if you're cash-strapped - take a look at this list of best used cars for matrics and students.
Also read Best used SUVs for matrics and students.
How do I calculate what I can afford?
Once you've budgeted using our guide above, AutoTrader has a nifty car finance calculator that can help you figure out how much a new or used car will cost you per month, based on interest rates, a deposit (or no deposit), and the repayment period.
Related: Can I finance a car with low income?
Buying a car is a big investment, so it's crucial to be responsible and make sure it fits into your budget. Take your time, do the math, and choose the ideal vehicle within your price range.
