The worst decision you could make right now could be getting yourself a new vehicle.
While the idea of starting the New Year with a new car might sound great, banks say buying a car right now, no matter how great the deal might sound, is definitely not a good idea.
The continuing fall of the rand in the past months, coupled with expected car price hikes next year and climbing import costs, will hit consumers’ pockets hard.
Speaking to Business Day, Head of Vehicle Asset Finance at Standard Bank Nicholas Nkosi said consumers should not be fooled by discount offers.He advises that consumers should carefully consider the long-term implications of buying a new car.
“What looks like a bargain today might turn out to be anything but during the course of a four- or five-year finance agreement,” Nkosi says. He adds that SA is in the early stages of an upward interest-rate cycle and inflation is also expected to go up.
If you really need a car and you can afford it, despite all the factors that have already been mentioned, Nkosi cautions consumers against buying a new model.
“Whatever vehicle you buy, don’t rush into it. This is a buyer’s market and consumers are spoilt for choice. The wrong one could cause you financial stress for years to come, ” he said.
The weakening of the rand this year has hit the motor industry hard, with sales of new vehicles in August dropping 8,2%, Wheels24 reports.
“Consumers and business have been under pressure all year, but July’s interest rate hike and the rand’s dismal performance this past month have taken a toll on the new vehicle market,” Wesbank motor division CEO Simphiwe Nghona said in September.