In the market for a new car? Keep in mind the real cost, says financial planner

There's nothing quite like that feeling of anticipation when taking the wheel in a new car for the first time.

But the excitement will eventually wear off while your vehicle financing obligations won't. And you'll be paying off that debt as the value of your new baby steadily depreciates.

Certified financial planner Paul Roelofse says to keep in mind that cars cost more than you actually might think they do.

We mustn't be lulled into the 'got to have it now' feeling and not take very clear notice of the actual vehicle cost from the time that you sign on.

Paul Roelofse, Certified financial planner

If you finance something for R100,000 over five years at 10%, the cost is 27.5% more

Paul Roelofse, Certified financial planner

RELATED: Car deal extras - what they can and can’t add to your finance contract

Don't forget this when a bonus or salary increase tempts you to splash out on a fancy new ride, cautions Roelofse. And keep in mind that a tax write-off doesn't offset the real cost.

When you get into the actual calculation it's actually cheaper to pay the tax than it is to pay for the vehicle.

Paul Roelofse, Certified financial planner

For more sober advice on purchasing a new car, take a listen:


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