MyMoney Online, ConsumerTalk with Wendy Knowler, Good to Know with Wendy Knowler, Good to Know with Wendy Knowler

How to buy a new car even if you don’t really have enough money for it

A balloon payment is a mechanism to try and make a car that is outside of your reach fit into your monthly budget. We recommend that clients actually not opt for balloon payments and rather buy more affordable cars.

WesBank (vehicle finance market leader)

The economy is toast, and car prices are skyrocketing.

Increasingly, instead of going without, consumers are opting for balloon car payment deals and buying cars they can’t afford.

A balloon car payment deal cuts the price of the car by, for example, 30%.

The rest is divided by, say, 72 months, leaving you with a lump sum to pay at the end of it.

You get to drive off with a brand-new, wealth-destroying machine par excellence.

It’s all fun and games until, after six years of paying it off, you still have to find the money for the 30% that is outstanding.

Many people then must finance what they still owe if they can.

It's a downward spiral.

The Money Show’s Bruce Whitfield interviewed consumer journalist Wendy Knowler.

Listen to the interview in the audio below (and scroll down for quotes from it).

If you have to buy a car with a balloon payment you, basically, can’t afford it.

Wendy Knowler, consumer journalist

Overall, 31% of Wesbank’s loan book is financed with a balloon deal…

Wendy Knowler, consumer journalist

Maybe you don’t qualify for finance seven years down the line… [If you do obtain finance] you’re financing an already financed amount…

Wendy Knowler, consumer journalist

Some people don’t realise that bogeyman is waiting for them… I’ve taken up many cases where there was clear non-disclosure… it’s not highlighted enough on the contract… quite small print…

Wendy Knowler, consumer journalist

In many ways, contracts are designed with the nastiest bits presented in an obscure way… Banking on people not reading the small print… blind trust… the stuff in there is legal…

Wendy Knowler, consumer journalist

There’s a focus only on what that monthly payment is… There’s a lot of exploitation of naivety…

Wendy Knowler, consumer journalist

It’s an expensive vanity purchase…

Wendy Knowler, consumer journalist

Enjoy The Money Show, but miss it sometimes?

Get the best bits emailed to you daily, right after it ends:

Subscribe to our Business Wrap Newsletter


This article first appeared on 702 : How to buy a new car even if you don’t really have enough money for it


Recommended

by NEWSROOM AI
Read More
'I would take the Prosus shares (25%) as well as Naspers (75%) shares'

'I would take the Prosus shares (25%) as well as Naspers (75%) shares'

Should Naspers shareholders take up Prosus shares? Bruce Whitfield interviews personal finance advisor Warren Ingram.

Woolworths (at R40 a cup!) makes the best takeaway hot chocolate in South Africa

Woolworths (at R40 a cup!) makes the best takeaway hot chocolate in South Africa

Seattle Coffee Company has the worst takeaway hot chocolate in the country, according to, uhm, "research" by Chaos Theory.

Old Mutual and Trevor Manuel are victimising Peter Moyo - Advocate Dali Mpofu

Old Mutual and Trevor Manuel are victimising Peter Moyo - Advocate Dali Mpofu

The Money Show's Bruce Whitfield interviews TJ Strydom, a journalist at Business Day and author of Christo Wiese’s biography.

You made a huge mistake downloading FaceApp if your privacy is important to you

You made a huge mistake downloading FaceApp if your privacy is important to you

Washington Post technology columnist Geoffrey A. Fowler did a forensic analysis of the Russia-based app. Check it out.

The rand isn't weak. It's the dollar that's strong. But it won't stay that way

The rand isn't weak. It's the dollar that's strong. But it won't stay that way

The rand is trading at fair value. It’s the US dollar that's overvalued. Bruce Whitfield interviews George Glynos (ETM Analytics).

[2018] Jesse Clegg (son of Johnny) opens up about money and growing up on tour

[2018] Jesse Clegg (son of Johnny) opens up about money and growing up on tour

[From the archives] Jesse Clegg talks about his famous father and attitude to money (hopes and fears, successes and failures...).

Popular articles
[LISTEN] SA's Ndlovu Youth Choir through to America's Got Talent semi-finals

[LISTEN] SA's Ndlovu Youth Choir through to America's Got Talent semi-finals

The choir has been wowing TV audiences in the US and across the world with their energetic performances.

Surfer comes up with insp-EYE-ring way to ward off sharks - take a look!

Surfer comes up with insp-EYE-ring way to ward off sharks - take a look!

Large eye stickers are being stuck to the bottom of surfboards in order to deter sharks.

'Ramaphosa wants to find ways to force pension fund managers to invest in SOEs'

'Ramaphosa wants to find ways to force pension fund managers to invest in SOEs'

Daily Maverick associate editor at Scorpio Sikonathi Mantshantsha takes a look at the week's financial news.

Lion cub worth R50k rescued from house in Cape Town

Lion cub worth R50k rescued from house in Cape Town

The feline was found by detectives at a property in Athlone on Wednesday following a tip-off.

[WATCH] Ndlovu Youth Choir shines once again with latest AGT performance

[WATCH] Ndlovu Youth Choir shines once again with latest AGT performance

The inspiring South African choirU2's Beautiful Day at America's Got Talent quarter-finals.

SA’s richest woman opens up about being a refugee and becoming a billionaire

SA’s richest woman opens up about being a refugee and becoming a billionaire

Magda Wierzycka – Sygnia’s renegade CEO – on her attitude toward money (hopes and fears, successes and failures, etc.).

Mystery solved: Why smelly, blue sewage has been leaking into Cape Town forest

Mystery solved: Why smelly, blue sewage has been leaking into Cape Town forest

The reason for the leakage has been revealed, explains Table Mountain Aerial Cableway MD Wahida Parker.