South Africans are feeling the financial squeeze, and car ownership is no exception. With over 80% of households concerned about the rising cost of living, the difference between securing a good deal and falling into a financial trap often lies in the fine print. One of the most common pitfalls is opting for an “affordable” car, only to realise later that it comes with significant hidden costs.
“A vehicle should offer freedom, not financial strain, but too often what looks affordable upfront ends up costing far more over time,” says Heide de Lange, spokesperson for Motor Plan Direct.
From long-term financing traps to unexpected maintenance costs, de Lange shares seven key strategies to help South Africans reduce financial risk and make smarter long-term car-buying decisions:
Beware the 84-month trap
Long financing terms may lower monthly repayments, but they often increase the total interest paid, sometimes by as much as 50%, due to compounding interest. Similarly, balloon payments may reduce short-term costs but leave buyers with a hefty final bill. De Lange advises choosing the shortest repayment period possible and putting down a larger deposit to minimise interest payments.
Avoid ‘creative’ finance schemes
Step payments or deferred plans assume salaries will rise over time, but real-life expenses like school fees and healthcare often increase faster. Less risky alternatives, such as Guaranteed Future Value (GFV) deals, provide predictable end-of-term options while keeping repayments manageable.
Factor in rising maintenance costs
Vehicle maintenance costs are increasing by 6%–8% annually. A basic R2,000 service in 2015 could cost over R4,000 today. Luxury models often incur even higher costs for tyres, parts, and labour. To manage this, opt for cars with affordable parts and servicing, and factor maintenance into your monthly budget.
Avoid insurance shortcuts
High-excess insurance policies may seem cheaper, but they can leave motorists financially exposed when accidents happen. “It’s a short-term saving that can lead to major expenses at claim time,” explains de Lange. Instead, she recommends flexible cover that allows mid-term upgrades or downgrades and reduces risk through smarter driving and parking habits.
A used car isn’t always cheaper in the long run
Although second-hand cars continue to outsell new models, affordability isn’t the only factor to consider. Some new brands offer competitive pricing with features rivaling premium cars. Whatever the choice, buyers should prioritise service history, warranties, and long-term value, while considering a maintenance plan to avoid unforeseen expenses.
Invest in long-term protection
Extended warranties and service plans may seem like grudge purchases, but they provide fixed costs and protection against costly repairs. “It’s important to remember that it’s not just about the cost—it’s about confidence,” says de Lange.
Think beyond the monthly instalment
“With cars being both essential and expensive, the best way to stay on the road is to consider the full cost of ownership, not just the monthly instalment,” de Lange says. “The first step is to rethink the upgrade. Make sure your dream car doesn’t become a financial nightmare. Holding onto a well-maintained vehicle can save thousands compared to the upfront costs of buying a new one.”
PERSONAL FINANCE
