As interest rates continue to increase, monthly instalments on car loans, home loans, personal loans, credit cards, etc… are also increasing. Many buy cars on balloon i.e. cars they cannot afford. One of the easiest ways to reduce your monthly expenses is to sell the car you bought on balloon and buy a car that is well within your means. One of my customers did exactly that and below is the high level info on the car she bought 3 years ago with a balloon payment of R198 000. Fortunately for her, she was able to sell the car and got enough money to settle the outstanding balance as well as the balloon payment. If she had kept the expensive car, she might have ended up losing her home because it was becoming extremely difficult for her to service her monthly instalments on all her debts, pay high petrol costs, etc…
Questions to ask yourself before you buy a car
- Why would you buy a car on balloon?
- What if you don’t have the money to settle the balloon at the end of the term?
- What if your credit record is dented in the interim?
Other benefits of buying a smaller car
- No worry about how she will pay the balloon when it falls due
- Cheaper petrol costs
- Cheaper tyre and other service costs
- No fear of going into default as interest rates continue to increase
In some instances, you might have to sell your car so you get out of the monthly instalments and NOT buy a new car for a while. This is likely to be the case if you are facing a job loss or you have other bigger financial challenges to attend to
If you are ready to sell your car and you want to buy a cheaper and more affordable car for you, contact us at email@example.com as we might be able to help you get a new car and assist with finance for the new car as well