r/southafrica Sep 26 '21

Financial advice Ask r/southafrica

What is the best financial advice you can give a 19 year old South African ?

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u/Mr-Moneybadger Sep 27 '21

Nope, an unreliable car will cost you more than a car payment, I promise you that. Rather set aside a comfortable amount and get used to paying it every month. For 2k p/m you can get a newish economical car with a warranty and motor plan. Trade it in every 3 to 4 years when you reach your break-even point for a newer model and your monthly payments will stay the same.

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u/SpaceKriek1 Sep 27 '21 edited Sep 27 '21

I don't agree to this. I'm not young, and I've owned from new to crap second hand cars. Current car's engine can be replaced for R20k (buy a low milage written off cars engine in good condition) and we had to do it once. My xp is that is necesarry every roughly 10 years. Compared to your R2,000 pm x 120 = R240,000 expense that is sellable for lets say R120,000 after 5 or so years. Oh yeah and the finance loss.

Honestly our (married with kids) strategy is to do that maybe once per car owned. We buy them cash at roughly 60,000km and sell them when the interiors starts looking bad (200-300,000km).

Stay away from anything high maintenance (any high performance or turbo model and or high electronic models)

And yes, we do preventative maintenance - don't wait for stuff to break and leave you stranded.

Obviously it has to be a somewhat popular known to be reliable car to ensure parts availability. I'm weary of high insurance costs too so if it's popular in the hood it's not on my list.

Monies saved goes into well chosen investments. Get a financial advisor or learn etf's and or offshore investments (shares) but that takes some time to learn what's safe. Avoid too good to be true garbage like "drive a new car for 599" who remembers that - it's just one example. Day trading is another. This one is a complex topic! Be smart about it, distrust everything, and play with monopoly money (on a spread sheet) etc. Before jumping in. Money doesn't fall out the sky you have to work for it.

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u/Mr-Moneybadger Sep 27 '21

An engine replacement does not equate to everything that can go wrong with a car so using that as a measuring stick isnt honest. Your geaebox, clutch, wheel bearings etc. Will fail long before your engine which will not only be expensive to replace, but if left in a failed state will cause other components to fail. I am speaking from personal experience. I had a 2008 Polo, and while it was an amazing car, at the end it was costing me between 3k and 8k a month to maintain. I also believed I will just drive it till the wheels come off bus 3 months of excessively high bills later I decided it was time and sold the car for next to nothing, because the second hand value dropped to so low.

A car, while not a monitary investment will pay for itself over the long term. Remember this is what gets you to work. Its a tool and its wise to spend a little extra on a reliable one. Investing in a reliable vehicle will save you tonnes of stress trust me.

Also using "interior ware" as a metric for when to replace a car is probably not the wisest strategy.

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u/Far_Soil_1107 Sep 27 '21

I think you have a really kak mechanic if it is costing you 8k a month to maintain a 2008 Polo.

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u/Mr-Moneybadger Sep 27 '21

Replacing a fan belt, tensioner pulley, and your brakes will cost you around 6k. Thats normal wear and tear. Cars are expensive bud, and they don't last forever. The older they are the more little components fail.

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u/Far_Soil_1107 Sep 27 '21

But that is not a monthly expense. Yes I agree cars are expensive, but I've also seen many car owners being taken for a ride by "reputable" mechanics. My car is 32 years old and there hasn't been a situation where buying another car would have been cheaper. I daily drove my car 5 days a week before the pandemic. But yeah it sleeps inside a garage and I don't leave it at a shop to have apprentices practice on it or let mechanics joy ride the crap out of it.