'Don't overspend on a car purchase - smaller and cheaper equals better value!'
There seem to be lots of good reasons to buy that new car at the moment - trade-in assistance, guaranteed buybacks, balloon payments, low interest rates...
But how big a role should any of these factors play in your decision?
Bruce Whitfield gets valuable pointers from Warren Ingram, personal financial adviser and executive director of Galileo Capital.
One key piece of advice: Always try to buy secondhand or at least older demo cars.
And when it comes to financing, even if you take a low interest rate deal, ensure that you pay a big deposit.
Ingram admits that's he's just taken on a financing deal himself to buy a car, but at a rate below inflation.
The calculation I do in my head... is can I do better with that money without taking excessive risk over the same time frame because if I can, then I should keep that money and invest it. But if I can't... then I should definitely pay off the car with cash.Warren Ingram, Personal financial adviser and executive director - Galileo Capital
I'm fairly confident in my ability to do a bit better than 1.5% a year over the next few years, and that was the reason for financing the car.Warren Ingram, Personal financial adviser and executive director - Galileo Capital
Having said that, I didn't do any of the other fancy stuff that these car companies offer... I definitely didn't take a new car... I definitely didn't do balloon payments or any of those things where they give me payment holidays or guaranteed value...Warren Ingram, Personal financial adviser and executive director - Galileo Capital
He says those options create a false sense that the buyer is getting a car relatively cheaply, while in fact they'd be overpaying.
Listen to Ingram's money-saving advice in the audio below:
This article first appeared on 702 : 'Don't overspend on a car purchase - smaller and cheaper equals better value!'
Warren Ingram explores the options, focusing on case study of guest house owner whose investments equal outstanding bond amount.Read More
Bruce Whitfield and personal finance expert Warren Ingram get to grips with why perhaps you shouldn't, if you didn't...Read More
On The Money Show, finance expert Warren Ingram explains why he believes the pros of the regulation outweigh the cons.Read More
Need the inspiration to save? The Money Show’s Bruce Whitfield interviews “Supersaver Julia” at around 7:15 pm tonight.Read More
Personal financial adviser Warren Ingram says active fund managers in South Africa have had a terrible time.Read More
Warren Ingram, wealth creator, answers listeners' questions about safe investing in anxious times.Read More
Did you know that the Trustees of retirement funds don’t have to pay it out to your nominated beneficiary?Read More
What is the concept of "market timing" and how can it help investors?Read More
The Covid-19 pandemic and the economic destruction in its wake has left some of us wondering if we'll ever be able to retire.Read More
Personal finance expert Warren Ingram shares his concerns and offers a few pointers.Read More