With today’s difficult economic scene, the majority of South Africans are struggling to cushion their pockets. Downgrading your car is just the best way to cut down your expenses and save some rands. Be it an increase in cost of living or simply reducing your expenses, downgrading will definitely benefit you. However, several things must be considered for this shift to go smoothly and pocket-friendly.
Assessing Your Needs – Present and Future
First of all, if you’re thinking of downgrading your car, look at the kind of needs you are experiencing towards transport presently. Consider the frequency of use, distances travelled, and any special requirements, such as carrying capacity or off-road possibilities. A consideration toward future needs would also be necessary—will they significantly change in the next few years?
Depreciation Rates
Cars are depreciating assets; that is, their value decreases over time. Some have a higher depreciation compared to others. Get some info on the history of the car for such models to try and understand how the value changes over the years. In South Africa, for instance, cars.co.za helps give an estimated survey of some rates of depreciation for various car models.
Cost of Ownership
It’s not just the purchase price. Remember to consider the total cost of ownership, insurance, fuel, maintenance and repairs. Smaller, more economical cars are normally cheaper on running costs. Check out common problems with the models you’re considering, for reviews and reports on vehicle reliability and maintenance costs.
Insurance Premiums
You can also save on insurance by downgrading your car. Insurance varies greatly between models, makes, and ages of cars to history from your driving. Use online comparison sites, or contact your insurance provider for insurance quotes for those cars which you are interested in. Websites like Sabinet do have great informative articles on how you can save on your insurance premiums.
Fuel Efficiency
Fuel is a major cost factor in running a car. On downgrading to a smaller and more fuel-efficient relative model, you will save quite an amount on fuel. You can compare models’ fuel efficiency ratings through different sources to find the best.
Resale Value end
While you are planning to downgrade, it is also wise to consider the resale value of your new car in the future. Not all cars retain their value as others do. Pre-buying research on resale values may be obtained through Moneyweb and other similar online websites to make an informed decision.
Financing Terms
If you are financing your car, you may want to check the terms of your loan. There could be penalties for early repayment, or the type of financing you have may affect your choice. You can consult your financial planner or your lender and describe any possible scenario in which you would sell your current car and purchase a less-expensive car.
Practicality and Comfort
Lastly, do not give away too much comfort and practicality. Make sure the car you choose is still going to suit your needs daily and that you are comfortable driving it. Test drive several options to pick one that best balances cost savings and comfort.
Conclusion
If carefully thought out, downgrading your car can be a very wise financial move. Keeping in mind what you need, how much the car is going to cost you, and whether it retains some value, and has efficiency, then you shall have made a very sound decision, which is saving yourself quite a bundle of money without giving up too much on convenience and comfort. Make use of the best sources available: cars.co.za, news24.com, and moneyweb.co.za to inform yourself with all the information and make a sober decision.
Also read: Is Returning Your Financed Car a Wise Choice When Facing Financial Strain?
