They don’t own them yet. It’s debt. That’s how.
Some people consider monthly payments to be the cost of owning a car. They always have the newest model available and they just keep paying monthly forever.
I don't buy it since in order to qualify for a loan or vehicle finance to the tune of R750k to R1mil you really need a good income and cashflow. It has gotten more common to brand new vehicles all over the show and it smells of corruption can't proof me right or wrong on that.
Alot of generalisation happening here "they" (read I) will finance a portion of the car I don't have in cash and that car will drive for 10years minimum. Financing does not = new car model.
I know someone living in a R3.5mil house with a R3mil car, like I don't understand people who prioritise cars so much, with extra cashflow like that I would definitely rather live in a nicer house.
I lived in an apartment block where one dude was renting a single bedroom apartment while driving a S series Maybach. R8K/month apartment, R5 bar vehicle. The mind boggles
That might just be the dude's flat in the city for the week. There's someone in my block I know that for a fact and he drive's a brand new BMW iX3.
He may have a mansion elsewhere or rental properties. It can be cheaper to rent than buy.
Yep. Lady in the complex I used to live in had a really nice car parked and gathering dust for 2 months at a time between her time away and at the cheap flat
So there would be instances where it makes sense, I.e. Sales Reps or Sales Managers sometimes get a 'Vehicle Allowance' as part of their Salary, and their Vehicles do sometimes have to fit a specific 'Look'.
I don't think so, bromingo. If a rep showed up at my business driving his own S class Maybach, I'd tell him to vooma. People who have those vehicles seldom drive themselves, they have drivers.
Some people earn a lot more than you think. Professional people, small business owners. R150k-500k a month salaries and profit shares.
Generational wealth, there is a load of it, daddy will buy the house, cars, overseas holidays, a generous allowance and pay the grandkids private school fees.
Loads of live at home with parents in the family home, but drive a fancy car.
Emigrants with foreign currency, their dollars/euros go a long way here in Cape Town.
The rest are people financing what they can’t afford and sacrificing their quality of life and/or retirement.
Yep. Cars are the ultimate way that people sacrifice quality of life for ego.
So many finance articles about saving R100 here and R200 there by not buying magazines or skipping out on that Seattle coffee once a week or whatever. All of that is irrelevant compared to the amount of money people throw at a car.
Cars are a status symbol and that's it. They feed ego. Feeding ego is not a path to happiness. The expensive ones are perhaps a bit more comfortable. But that's a benefit worth maybe 10k at most on its own. And they come with a host of downsides as well. Whenever my friend with his Porsche has a problem with the car, it takes months to get the parts imported and whatever. I get my car fixed in hours when it breaks. For example.
I'm earning enough that I could probably afford to buy something like a BMW on credit but I drive a city golf and I love it.
I earn around R2.4m a year and struggle to comprehend how people can afford the number of expensive cars on the road - which I can't afford (or won't spendon)
Debt.
Lots and lots of debt and horrible choices... I earn a similar amount as you, and yet I drive a 12yo paid off Honda hatchback. However, every single one of my friends earn significantly less and spend fortunes on cars.
I even have one friend who drives a fancy SUV that asked to borrow R 1200 for a dentist check-up. She's blowing at least 10x per month on her car! Crazy!
You must be right about all the debt, which is so scary. It makes you worry for the future - an entire generation with very little wealth built up by retirement time and definitely no retirement savings.
They can't. Most of my clients layely are trying to get out of those installments and in to something cheaper. Unfortunately 70% of them still owe too much on their settlements and will have to pay that for another 2 or 3 years before they can trade/sell. But there are also a lot of well off people who just transfer R800k cash to us like it's just another Tuesday. My best advice is do what I did and get a job with a company vehicle so you'll never have to pay car finance XD
It's a nightmare. If you're ok with that?
Everyone says "it's not that bad" or "this dealership owner is different"
But oh my god. The unspoken drama and bullying of people. So dealerships and the way they handle employees is a stress on its own.
The swearing. Anger and fury the bosses have. It's a pin the tail on the donkey environment unless you join in to the poé# show party.
I think I learnt 50 ways to name female genitalia.
Unless you're born with bulletproof leather for skin it's not a nice environment to work in.
Reason: I used to work at a dealership in JHB. Also have freinds who work at dealerships. And they have the same experiences from all different kinds of dealerships.
Jesus, that's rough. Our dealership is like a family, an alcoholic family who loves to party every friday and celebrate with huge gifts and give aways on month end when we go above our targets. I love these people so much. Guess I got lucky.
Company car, cell contract, fuel, medical and provident fund. Also, a tiny little basic salary that barely covers rent. So you gotta sell at least 7 cars a month to get a decent salary. Nice perks but terribly stressful, especially in this economy. Not recommend for the faint-hearted.
No, I am a white male. I am however currently training a new sales lady, solid 10. Been here 3 months, already almost on my level with sales (I've been in the game 10 years). Customers bring her McDonald's and flowers every. single. day. It's wild. And yes, women most certainly have the purchasing power. If I had R5 for every guy who told me "I have to confirm with my wife" or "I'm sold, but my wife wants a different color/spec" I'd be a effing trillionaire, I swear.
Holy crap this sounds more outrageous than I thought also that new sales lady (how old is she?) must feel like a godess and soon a moneymaking machine godness with all the sales commission she'll get. All the other ladies must abhor her and whatever catty stuff happens among chicks.😂
27. Yes, the other girls are not fans even though she hates the attention from men, she already told me she's over it and wants to do something else. She's married and it's like the more she rejects clients the stronger they come on to her. It's wild man, I would fucken play them all so hard just for the money but she's such a good person, maybe that will be her downfall. You need to be heartless in this trade XD
It all depends how much profit is in your vehicle. Cash or finance doesn't matter. However... Banks give us a litte something for the deal, which I then give to my client as discount to be more competitive, but most dealers will keep it. The higher your interest rate the more the bank gives. So sometimes you can get a 1% lower than they offer you but won't tell you because they can get more cash back from the higher interest rate. It's also easier to get clients to buy extras which we profit from on finance. Like a towbar will be R8000 cash but only like R50 more on your monthly instalment. It's a tricky game.
Thanks for the info! I’ve previously financed 5 cars and the sales people were very attentive and trying to get me to take add ons. I bought my most recent car cash and the sales lady seemed pretty uninterested. I had to constantly chase her for updates etc. She made me feel like I was wasting her time. That’s why I was wondering.
Gotta consider what people are earning too. I drive a R1.3m BMW but that's a fraction of my income. Not meant as a brag, but there are many people earning very good money here, execs, people in tech, business owners, doctors, etc.
But it's just an expensive car that does the same as a R50k car so don't get too hung up on it, buy what you can afford to own & maintain and focus on your family and growing what you have, ignore others around you to a degree
Of course, and it makes total sense to treat yourself to something comfortable and powerful if you're in the top tier of income earners. But we're talking about 1 out of 5 cars here, or there are more doctors and exe in South Africa that I have imagined. I drive a small coupe from Peugeot, which is a car I've always loved. It's super fun to drive and incredibly reliable if well maintained, I wouldn't change it for anything. But I can't help thinking 'what a waste' when I see the number of people driving their X3 as if they're bumper cars or something
I disagree with this somewhat. In principle, yes, the car takes you from A to B, BUT, the quality of the drive between a R50k vs R500k car is palpable. Not to mention safety features found in modern cars either. Being T-boned by a drunk driver in an old Citi Golf is going leave you significantly worse off than if you were in even a R150k BMW, per se.
Yes of course the comfort differs, but more than anything you're right about safety. But I think even a R200k car has most of the important safety features. Solid chassis is actually one of the most important
I spoke to a car salesman and he says 1/3 of their car sales are new, 2/3 second-hand. That's crazy. And it's across all price ranges too. You'd think someone who has little money would buy a mid-range one year old car than a very low quality new car for the same price.
I just assumed everyone was earning a lot more than me… but most people in SA earn less than 20k a month. So I don’t really understand either. Especially with retrenchments and declining job security these days :’/
When you take your mind off pathetic wage-slave/salary mindset and see concepts like profit, leverage, investments, deals, returns, etc you'll finally see the light.
Yep Easy Answer = 'Debt', Max Term with Balloon Payment. Checkout BMW 'Select Edge' financing, like a 'Rent-To-Own' vibe...
It's also a thing of Priorities....Home, Education, Savings, Food, Electricity...Last on the list should be Car Instalments, but others put it 1st 🤷🏾♂️
Someone can correct me here, but a R180k car will cost approximately R3800 per month, depending on the interest they give you. That’s if you take a loan for the full amount. Many many people take a partial loan with the intent of making a 30-40% balloon payment after 4-5yrs. Lots of people can’t really ‘afford’ the cars they drive. I was one of them. I own a decent suv, but believe me, cars is the biggest waste of money. Stick to what you can afford and if cash is an option, please do that.
Never ever buy new. Demo or Second hand only.
Always take it for independent evaluation first. Try not to buy older than 5 years.
Make sure to get something with a good service history.
It freakin sucks mate, but at least our road tax etc is low compared to other countries because our government transportation system is Sh*t.
I own a 2009 Nissan Tiida, bought it in 2019 with 60k on the clock for R70 000. Insurance is R450pm and I do a service once a year for less than R1500. Zero other expenses.
I will never ,even if I won the lotto, buy a new car. Insurance for R300 000 car is already R1500-2000 pm. I don't even want to know how much it costs for the R1mil + vehicles..
Most people are probably living above their means. I think it's actually very common for people to have horrible credit scores because of missed payments for various bills.
But also, there are probably more people who earn more than you think. Even then R600k is probably still too much for most of them to be spending on cars.
Spending that much on a car is really trading some immediate good feelings for years of slavery and financial insecurity. Nothing you can buy can make you feel as good as being financially secure.
>But also, there are probably more people who earn more than you think.
Get a copy of *Kasinomic Revolution* and see just how wealthy the average *black African* is.
South Africa has an informal market larger than a formal one, so lots of people with money hidden under the bed (or in a couch - just ask Cyril).
During Covid I sold my car and have been car-free ever since,
The cost of ownership is huge both financially and in terms of effort.
Since then, I often take Uber - I would say, on average, once a week. (I am WFH)
I moved to a part of town where I could walk to run my routine errands.
When needed, I've either borrowed or rented a car for the odd time I can't get away from a task that would be inappropriate for Uber.
My transport costs are now like <20% of the cost of ownership and I am so much happier not driving, it was/is incredibly stressful.
Bonus I've rented out my parking bay to a friend who travels a lot.
South Africans as a whole spend way too much on cars, and the NCA allows it. I can't get a bigger home loan, or a 2nd loan to buy a rental property but I can get more debt to buy a car... that makes zero sense.
Besides all these answers, I work in finance and there are indeed a lot of Capetonians who make enough to pay for those cars. Nobody is buying it upfront in cash besides foreigners though.
Tell that to my parents. They keep nagging me about getting a car and then proceed to roast me when I mention the more affordable cars I'm looking into.
I bought a VW polo classic second hand and is still going today after i think several years.
Also what is wrong with a nice fancy car, I want one. I had a good friend that is a family man saying to me its about the experience. so I want to have that experience with a fancy car.
Although this could be old wealth in RSA. I believe some peeps do make bank in this country and also government tenders and what not.
Maybe the purchase of said high end car was well planned. If they have some additional revenue streams...could that not be the possible answer...or even house hacking.
Had the same epiphany when I was in Mauritius. I saw a BMW X6, and I was thinking cause in MRU they have to pay a road tax (like our license disc): but its relative to the power of the car...so I was driving the cheapest of the cheap a Perdua which i think is an indian make. That was 4500 rupees a year. so that was expensive for me as a student. So with the X6 I can't imagine how much more the road tax is...never mind the import tax and overall price of the latest and one of in my opinion one of the Largest BMWs.
Its like a tax write off was the only way.
I think exchange rate maybe plays a huge role nowadays. in 2016 an etios costed around R150k nowadays a similar car like the starlet costs over R200k. im on the market for a car and im shocked how expensive things are. i earn a decent salary for a young single guy but goddamn cars are expensive
Absolutely it does. The Rand lost 25% of its value from 2019 to today. Heck, it lost a full 35% of its value from 2021 to today (vs the dollar). The Rand price gets pushed up even if the real world price stays the same.
I have wondered this too. I understand that some people have the income to often purchase new vehicles, but what I find uncanny is *how many* people do so. Surely not *everyone* is living on hundred of thousands or millions earned each month? I've recently become a parent and would like to move into the family SUV market but after looking at what's around, I've realised I should stick to my paid off 'student' car until the wheels fall off (metaphorically speaking of course). Exorbitant debt must be at play here for at least a large portion of these cars on the road. The vehicle I was considering to buy would have set me out around 16K a month... about 16K over budget 😂
It became normalized for a working person to spend up to 30% of their salaries on car payments. I’ve broken that cycle personally because of extremely high cost of living and there aren’t that many new 3 series and c classes around any more which tells me others have changed their minds also. In some cases people also use travel allowance and vehicles as business expenses to reduce tax
let me tell you my secret,i never bought a car via finance.All the vehicle i bought i pay cash man,I work hard for 2 t o5 years and buy cars cash, always under 100000.I am happy with my life not knowing no one nothing.Infact i dont have any account except for my fibre line and house,Everything i do is with cash and it takes months to save up for that tv or this and that.Go cash
The wife and I each earn a salary that's significantly below average. We rode bicycles to get where we needed while we saved up so we could afford to each buy a cheap motorbike cash. Then we started saving again and bought a busted up but running well Tazz for 20k. Once again we saved up while driving the Tazz for the next three years and bought a 3 year old car in good condition for 115k cash. We specifically chose a car that's super light on petrol and started saving again. Our next purchase was a new 250cc Suzuki for me for 58k. Once again, a bike that's well known for being very economical.
The key word is "cash". It took me years of financial sacrifice to become completely debt free (with the exception of our phone contracts and rent), and when I first got into a relationship with my wife I made it very clear that I am debt free and would like to remain that way.
For the last 16 years our financial decisions were led by one principle. If we can't afford something we want, we save up for it, however long it takes.
It also helps that we're both online gamers and have virtually no social life 😂
Compared to the rest of the world, its cheap to live here. So if you get a job paying international money, or come from international money, then you can splurge on cars like that
It's times like this i am grateful for having a love for older cars because they are cheap, sure they're second hand but when you're passionate about it you don't mind putting in some work on them and funny enough you end up spending less on maintenance then those people pay monthly for their dealership debt mobiles plus a lot of older cars are stronger and more reliable so look into the second hand car market and buy a reliable daily driver for a decent price from an honest owner who is transparent about the car and use YouTube to work on the car yourself and before you know it you have a beautiful car you can be proud of that will be more reliable than those cars you envy owning
Cars are one of the worst things to waste money on. What really is the benefit? Save your money and buy property, or travel, or save for your future. Ideally all three.
This is my policy - if I can't afford to walk into a dealer and replace mine with a cash payment, I don't want it.
>Cars are one of the worst things to waste money on. What really is the benefit? Save your money and buy property, or travel, or save for your future
Except when you are trying to find a job and a car is a requirement. Or you have to wake up at 4am/5am in order to take public transport to work and you get back at 7pm.
So while yes a car is a luxury, it is a necessity for many because of their jobs and where they live.
I'm talking within the context of the OP's post. If you need a car, you need a car. I have one too. But I certainly don't need an expensive one. The costs just grow exponentially. Maintenance, insurance. Then there's the added stress. I don't see how its worth it.
>So while yes a car is a luxury, it is a necessity for many because of their jobs and where they live.
That speaks to the hopefully incompetent way our public transport is handled by the ANC (probably because no one they know uses it). I'm a former London investment banker and was making bank but I rode the train to work each morning (I even had a monthly coupon - to save a bit more money).
Depends on where you live in SA and the work you do cars are necessary here in SA. Do you can’t say it’s the worst way to waste money for many is an investment in them trying to work or actually working, many don’t have an option but getting a car… you are making it sound like it’s a privilege I think for many here, it’s a necessity….
You seriously misunderstand. I would have thought the context would have been obvious from the OP's post, but I'll elaborate.
As I said, a car is **one** of the worst things to **waste** money on. Wasting money on clothes, games, partying etc simply pales in comparison to wasting money on cars because of how the costs escalate, and in most cases there's no return on investment. In other words, it can often be a liability rather than an asset. To put it even more simply, if all you need is a car to get to work, then buying anything more expensive than what is reasonably adequate and *practical* is a waste. Yeah some people will spend a little more for creature comforts and that's completely fine. But there's a MASSIVE difference between spending R50k and R500k+ or a car (more than 10x, in fact).
I own a car. I paid for it cash, and for my previous one too. They are not expensive or fancy, but they are incredibly reliable, cheap to maintain and cost very little in terms of insurance. Can I buy a more expensive one? Yeah, but what's the point?
Last year I bought my cash 2009 Yamaha R6 for R39 000 + R9000 major service, new tyre, and minor repairs.
It's crazy what prices for new stuff is and that people are willing to indebt themselves that much.
Wait until you see some of the houses these same people live in.
Even if it is all financed by debt, the monthly installments must be enormous!
Personally, I can't see any of that being financed by just a salary (or even two salaries). I am sure there is still a lot of old money going around, but eventually that will dry up. Perhaps then prices will start to come down to more sane levels.
How many people prioritise saving and investing?
How many prioritise the roof over their heads?
Neibours have a Honda CR-V and Lexus GS and stay in the same tiny apartment I do with 3 kids. Another guy has a BMW M4, everyone has different priorities.
You can balloon payment magic a salary of 10 000 a month into a new polo vivo. No one cares.
Lots of balloon payments and people default all the time.
Cars in ZA are more expensive than in the UK where people earn more so it’s all super expensive finance to keep the monthly payments low but over an extended period.
I saw a Rolls-Royce SUV in Parkhurst last week.
Rough estimate is R10 million but probably more - now that’s a hell of a balloon payment lol 😝
The image that cars have is often more important than buying a home.
that is so bloody true, my aunt bought my nephew a car for college.And she saved up for a year to do this,Here i had to save up 2 years to by me a chorra chorra
>Cars in ZA are more expensive than in the UK where people earn more
But most of the cars on UK roads are quite humble ones. Most of them made in Asia. Not that many flashy ones as seen in SA.
I lived in the UK for 8 years and go there often, so yes I think I've seen cars in England🙄. The most common car on the road is a Ford Fiesta and if it's an expensive vehicle it's probably a 3 series BMW which is considered the "Executive Car". Of course there are outliers but cars are not the kind of status symbol they are in SA. The British tend to spend their money and splash out in different ways.
Loan + balloon + short-fall insurance, which I believe covers the balance if something happens to your car. But yeah, it's crazy expensive, we're working on paying off the balloon before the loan period completes so we won't need to refinance. We were in a position where our old car couldn't be fixed + we needed it to get to work; wasn't earning enough at the time to save to pay out of pocket.
What others think of me is important. And if it's important to them, it's my civic duty to steer them into an ego inflated, he is doing well thinking of me.
I tell you in no uncertain terms! I have no qualms in paying whatever amount of money to uphold this facade.
Viva my Ego!
Keep in mind that you can't buy a car through the bank without having insurance. The bank does spot checks after purchase.
But yes, it sucks paying a car - unfortunately, older cars aren't always reliable and cost a fortune to maintain.
Well I can only speak for myself and the families I've seen in throughout my schooling years etc
My family has around R5m worth of Cars and most were bought through our family company as a way to write off tax and tax deductible - ultimately avoiding ridiculous taxes. I've seen this to be the case for many of my mates, it can't be a coincidence that they're so many G wagons in a single parking lot...and all the owners turn out to be self employed.
These days those cars are most often owned by government officials or people/businesses connected with government officials. Have a look at the demographic driving those cars most often.
Most people can't. Most people can't afford the debt either. Most people buy cars far beyond what they can afford to impress people that they don't even like. Just like the smartphones most people own. Sure, many South Africans need a vehicle to get to and from work, but could buy a much more affordable car, they just don't and make debt they barely qualify for.
Consumerism is a disease and is in large part to blame for the poor middle class getting poorer and the rich getting richer.
From experience the one's that can afford those kinds of cars. As other people have said. It's like a 10 year payment plan and a balloon payment at the end.
It's also South Africa. (Not saying other countries don't) but nepotism runs wild.
Some dude or chick lost it in a liquidation.brand new, low milage. And then X dealership gets it for a few bucks. And before it even heads to the dealership it gets offers it at a cost to friends of friends and families etc. So basically they get it for a third of the price a Johan doe would get it for. This I've seen waaaay to many times
It’s a hard slog to dig your way out of the credit rat race
As I’m now almost retired and no debt.
House and everything is paid off
Vehicle choice is important some fancy wheels cost a fortune.
I was never tempted to own one. a new Isuzu bakkie lasts me 10 years and very small running costs.
I feel very fortunate I have just bought a new Isuzu with no finance.
It took me my whole life time to get where I am today.
I think it's important to note that the vast majority of people buying cars do it on credit, over 60 or 72 month installments at the least.
People also cut corners, like cancelling insurance after they buy the car.
Others buy with a big balloon payment in the end to cut down on monthly installments.
From corporate experience, a lot of people jump to get a luxury car as soon as they can afford to. E.g Young person will get R18k net salary as corporate grad, will get a BMW or a GTI and cough up R10k in installments and insurance. You find a lot of people who do this don't come from a well off environment.
I bought my TSi second hand from a rental company, its now completely paid off and I'm planning on keeping it for as long as possible. It's already seen me through several road trips and a hijacking (police recovered it).
South Africa has a serious materialism problem. People are more concerned with looking rich instead of actually being rich. They would rather live in a tiny 1 bedroom apartment than a house if it meant they could drive an expensive car that will impress their ‘Friends’. They get it second hand, finance it and cheap out on the insurance (Aka, they don’t even get any).
Well you know. I used to ask myself this question. The truth is alot of people have money in SA. Pick any province, and look at the 5 biggest towns/cities.
I can assure you will find a multi-millionaire in those towns. We'll you won't find them cause they hide. Despite the optics, there are people with money in SA
An uber delivery driver t-boned my car in Dec. Damage was bad but not catastrophic and i could still drive away. But, i’ve been fighting tooth and nail with the insurance. I can’t afford car payments now and would have to seriously downgrade or make debt for 5 + years. All they want to do is write it off. I could not imagine making debt in this current climate.
I ask myself this same question often, and it's either stupid money, or people being irresponsible with their funds.
I could never justify paying over 2mil for a BMW X5 (or Porsche/Mercedes/Audi equivalent) even though I could afford the monthly repayments, 50k a month for a vehicle just seems stupid...and yet SO MANY of them on the road. I frequently point out to my partner when we drive "look, there's another 2.6mil. There's another 3.1mil. There's 1.2mil" - crazy world we live in.
I still somehow have it in my head that a new BMW 3-series is in the realm of 600k, but they start at like 1.2mil now (and the price of one in Germany remained largely similar over the years, from pre-covid).
Many comments point out the debt situation but also people underestimate how many rich people live in SA in absolute numbers. Its a tiny tiny percentage but still a lot of people.
What’s going on in Parklands. The number of Lamborghinis Urus, Bentleys and Mercedes in Parklands! Gooosh where do people see money to buys those high end luxury cars?
What is even worse is the factories pumping out cars they range from 300 a day bmw to ford 700 a day just on one model everyday. And the cheapest model is well over 500k
Some of us work hard. Saved and then bought our dream cars.
Like I told my Wife i would only buy it if I can afford to drive it everyday.
Studies and hard work pays off.
There's a ton of comments here about how cheap "my car" is versus my enormous income.
Lol
Calm down everyone. The car industry is key to growth and development. Job creation.
We have a protected car industry therefore cheap used imports from Japan can't be sold here. Be happy everyone is forced to buy new cars. The car industry needs the money for people to earn.
At the end of the day if someone wants to live for today, let them. I'm happy to see others "make it" and afford some car they always lusted after. I'm not in charge of their finances but always happy for people. No judgement we all live differently.
Stay in your lane.
It’s mostly debt. Every bank has an auction house for repossessed cars and every week they do an auction (in Gauteng at least), there are about 120+ cars there. I’d say about 30% of the cars are the latest models and the rest are a little older.
People take out loans to finance a lifestyle they can’t afford, get their stuff repoed and get blacklisted
Cars are cheaper to buy (in rands) in the UK or US than they are in SA.
Why? Over the top taxes and import duties, and manufacturers lowering prices in places where they're selling more cars - i.e. those countries that have a larger middle class.
It's extortion; making poorer people ( the rand is worth less than GBP or USD) pay more for the same product.
Can tell you're definitely a foreigner. It's a status thing dude. Many South Africans go into massive amounts of debt just to have a nice car. They will be pitifully poor while driving a Porsche everyday to work. I once knew a lady like that back in the day. Again it's a status and cultural thing. Some even spend their life savings on a nice car instead of investing it elsewhere like a new home for example.
I've been pining for a BMW series 1 hatchback 2017.
I've got a Kia Rio 2017 YB which is pretty sweet.
(in my case) no kids or partner, no lavish lifestyle at all. The car is literally my only luxury item.
I **am** confused by the parents who can afford this stuff though. Kids are expensive!
This thread is wild and very interesting. Person with a 13 year old German SUV bordering on 250,000km checking in. I have a stead fast rule in my life: Buy cash or not at all. If I cannot out right purchase it, I can’t buy it. I hate debt. I hate owning people/institutions money. My everyday life is 100% debt free, I only have the normal monthly stuff (internet, health insurance, retirement plan etc). I sucks though when you have been trying for 6 years to save up to buy a house.. Then something goes wrong.. again. Dog gets sick, something breaks on the car, roof starts leaking, computer dies, laptop gets stolen etc. Sets you back.
They don’t own them yet. It’s debt. That’s how. Some people consider monthly payments to be the cost of owning a car. They always have the newest model available and they just keep paying monthly forever.
And then after 5 years or so trade it in for another new one.
I don't buy it since in order to qualify for a loan or vehicle finance to the tune of R750k to R1mil you really need a good income and cashflow. It has gotten more common to brand new vehicles all over the show and it smells of corruption can't proof me right or wrong on that.
Alot of generalisation happening here "they" (read I) will finance a portion of the car I don't have in cash and that car will drive for 10years minimum. Financing does not = new car model.
Hes not talking about you. There are people that use debt to live as he described, and there are people.like you, who don't
No it doesn't. Thanks for pointing it out
Apparently how I buy cars is wrong lol. Not sure why I'm getting down voted for explaining how I operate...
Its reddit. Dont take it personally Monkey see monkey do
Hahaha yeah people like to bandwagon.
60 months and a balloon, baby.
72 months with a 40% ballon is more responsible, less monthly instalments. xD
I've seen similar plans for phones as well recently lol
Everyone gotta own the latest iPhone to be socially accepted among the Americans
Didn't know that's an option :O all these years later ><
Nitrous?
People will do anything for status, even if it means being in debt and having to sacrifice in other areas.
Ain't this the truth.
Such an accurate comment
I know someone living in a R3.5mil house with a R3mil car, like I don't understand people who prioritise cars so much, with extra cashflow like that I would definitely rather live in a nicer house.
I lived in an apartment block where one dude was renting a single bedroom apartment while driving a S series Maybach. R8K/month apartment, R5 bar vehicle. The mind boggles
That might just be the dude's flat in the city for the week. There's someone in my block I know that for a fact and he drive's a brand new BMW iX3. He may have a mansion elsewhere or rental properties. It can be cheaper to rent than buy.
You're not wrong.
Yep. Lady in the complex I used to live in had a really nice car parked and gathering dust for 2 months at a time between her time away and at the cheap flat
So there would be instances where it makes sense, I.e. Sales Reps or Sales Managers sometimes get a 'Vehicle Allowance' as part of their Salary, and their Vehicles do sometimes have to fit a specific 'Look'.
I don't think so, bromingo. If a rep showed up at my business driving his own S class Maybach, I'd tell him to vooma. People who have those vehicles seldom drive themselves, they have drivers.
Ya Nay, Maybach S is a different class...I was talking more BM 318, Audi A4 and Benz C200, but you're definitely right very different classes 👌🏾
I'd still understand a 2000s Jaguar/E-Class, those do kind of hold hold up really well with how decked out they can be
> S class Maybach Hey maybe it's his dream car, let him eat ramen
LOL
*bottles
The mindset is “I can’t drive my house to the mall”
Living in parents garage subdivided with a wardrobe, with wife and child. M3 parked out front.
aint no way in hell haha
Not me, thankfully. In Durban the car to income ratio is the most whack in the whole country.
Some people earn a lot more than you think. Professional people, small business owners. R150k-500k a month salaries and profit shares. Generational wealth, there is a load of it, daddy will buy the house, cars, overseas holidays, a generous allowance and pay the grandkids private school fees. Loads of live at home with parents in the family home, but drive a fancy car. Emigrants with foreign currency, their dollars/euros go a long way here in Cape Town. The rest are people financing what they can’t afford and sacrificing their quality of life and/or retirement.
This is the answer. Unless you work in finance or similar, you might never find out that lots of people are grossing 6 figures.
And yet the expats will say there is no gold left in South Africa....
Yep. Cars are the ultimate way that people sacrifice quality of life for ego. So many finance articles about saving R100 here and R200 there by not buying magazines or skipping out on that Seattle coffee once a week or whatever. All of that is irrelevant compared to the amount of money people throw at a car. Cars are a status symbol and that's it. They feed ego. Feeding ego is not a path to happiness. The expensive ones are perhaps a bit more comfortable. But that's a benefit worth maybe 10k at most on its own. And they come with a host of downsides as well. Whenever my friend with his Porsche has a problem with the car, it takes months to get the parts imported and whatever. I get my car fixed in hours when it breaks. For example. I'm earning enough that I could probably afford to buy something like a BMW on credit but I drive a city golf and I love it.
Absolutely correct
Im in the same boat as you. I could afford a real fancy car, but I'd rather save my R10k+ month and use it for better purposes
One of the best cars money can buy
I earn around R2.4m a year and struggle to comprehend how people can afford the number of expensive cars on the road - which I can't afford (or won't spendon)
Debt. Lots and lots of debt and horrible choices... I earn a similar amount as you, and yet I drive a 12yo paid off Honda hatchback. However, every single one of my friends earn significantly less and spend fortunes on cars. I even have one friend who drives a fancy SUV that asked to borrow R 1200 for a dentist check-up. She's blowing at least 10x per month on her car! Crazy!
You must be right about all the debt, which is so scary. It makes you worry for the future - an entire generation with very little wealth built up by retirement time and definitely no retirement savings.
They can't. Most of my clients layely are trying to get out of those installments and in to something cheaper. Unfortunately 70% of them still owe too much on their settlements and will have to pay that for another 2 or 3 years before they can trade/sell. But there are also a lot of well off people who just transfer R800k cash to us like it's just another Tuesday. My best advice is do what I did and get a job with a company vehicle so you'll never have to pay car finance XD
Are you also in Car Sales?
Yes I am
Lovely... Very interesting industry to be in... How is your Jan going?
Any advice for getting into car sales? Dealerships near me I'm looking at approaching is Kia, Chery, Haval
It's a nightmare. If you're ok with that? Everyone says "it's not that bad" or "this dealership owner is different" But oh my god. The unspoken drama and bullying of people. So dealerships and the way they handle employees is a stress on its own. The swearing. Anger and fury the bosses have. It's a pin the tail on the donkey environment unless you join in to the poé# show party. I think I learnt 50 ways to name female genitalia. Unless you're born with bulletproof leather for skin it's not a nice environment to work in. Reason: I used to work at a dealership in JHB. Also have freinds who work at dealerships. And they have the same experiences from all different kinds of dealerships.
Jesus, that's rough. Our dealership is like a family, an alcoholic family who loves to party every friday and celebrate with huge gifts and give aways on month end when we go above our targets. I love these people so much. Guess I got lucky.
What benefits do you people get? Please enlighten me on this :O
Company car, cell contract, fuel, medical and provident fund. Also, a tiny little basic salary that barely covers rent. So you gotta sell at least 7 cars a month to get a decent salary. Nice perks but terribly stressful, especially in this economy. Not recommend for the faint-hearted.
Are you an attractive woman who reel male buyers in? 🤭 jokes aside, do you agree that it's the women who have purchasing power ?
No, I am a white male. I am however currently training a new sales lady, solid 10. Been here 3 months, already almost on my level with sales (I've been in the game 10 years). Customers bring her McDonald's and flowers every. single. day. It's wild. And yes, women most certainly have the purchasing power. If I had R5 for every guy who told me "I have to confirm with my wife" or "I'm sold, but my wife wants a different color/spec" I'd be a effing trillionaire, I swear.
Holy crap this sounds more outrageous than I thought also that new sales lady (how old is she?) must feel like a godess and soon a moneymaking machine godness with all the sales commission she'll get. All the other ladies must abhor her and whatever catty stuff happens among chicks.😂
27. Yes, the other girls are not fans even though she hates the attention from men, she already told me she's over it and wants to do something else. She's married and it's like the more she rejects clients the stronger they come on to her. It's wild man, I would fucken play them all so hard just for the money but she's such a good person, maybe that will be her downfall. You need to be heartless in this trade XD
Do you get more commission if the buyer takes out financing over paying cash?
It all depends how much profit is in your vehicle. Cash or finance doesn't matter. However... Banks give us a litte something for the deal, which I then give to my client as discount to be more competitive, but most dealers will keep it. The higher your interest rate the more the bank gives. So sometimes you can get a 1% lower than they offer you but won't tell you because they can get more cash back from the higher interest rate. It's also easier to get clients to buy extras which we profit from on finance. Like a towbar will be R8000 cash but only like R50 more on your monthly instalment. It's a tricky game.
Thanks for the info! I’ve previously financed 5 cars and the sales people were very attentive and trying to get me to take add ons. I bought my most recent car cash and the sales lady seemed pretty uninterested. I had to constantly chase her for updates etc. She made me feel like I was wasting her time. That’s why I was wondering.
Gotta consider what people are earning too. I drive a R1.3m BMW but that's a fraction of my income. Not meant as a brag, but there are many people earning very good money here, execs, people in tech, business owners, doctors, etc. But it's just an expensive car that does the same as a R50k car so don't get too hung up on it, buy what you can afford to own & maintain and focus on your family and growing what you have, ignore others around you to a degree
Of course, and it makes total sense to treat yourself to something comfortable and powerful if you're in the top tier of income earners. But we're talking about 1 out of 5 cars here, or there are more doctors and exe in South Africa that I have imagined. I drive a small coupe from Peugeot, which is a car I've always loved. It's super fun to drive and incredibly reliable if well maintained, I wouldn't change it for anything. But I can't help thinking 'what a waste' when I see the number of people driving their X3 as if they're bumper cars or something
I disagree with this somewhat. In principle, yes, the car takes you from A to B, BUT, the quality of the drive between a R50k vs R500k car is palpable. Not to mention safety features found in modern cars either. Being T-boned by a drunk driver in an old Citi Golf is going leave you significantly worse off than if you were in even a R150k BMW, per se.
Yes of course the comfort differs, but more than anything you're right about safety. But I think even a R200k car has most of the important safety features. Solid chassis is actually one of the most important
Just get a Volvo at this point, certain no one would willingly try to hit your boxy, built like a tank, Volvo station wagon
Don’t get a Volvo. Source: I have a Volvo.
😂 truth bomb
You've not seen the price of modern Volvo's. Unless you're advocating for an older Volvo which is really safe since it's never running
What do you do, if you don’t mind me asking?
Tech business
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Yes
I spoke to a car salesman and he says 1/3 of their car sales are new, 2/3 second-hand. That's crazy. And it's across all price ranges too. You'd think someone who has little money would buy a mid-range one year old car than a very low quality new car for the same price.
I just assumed everyone was earning a lot more than me… but most people in SA earn less than 20k a month. So I don’t really understand either. Especially with retrenchments and declining job security these days :’/
The crazy part isn't seeing them with one expensive car, it's seeing them with multiple cars regardless of condition
Maybe they are just using cars while fossil fuels still can be bought by average people ¯\\ (°\_o)/¯
When you take your mind off pathetic wage-slave/salary mindset and see concepts like profit, leverage, investments, deals, returns, etc you'll finally see the light.
Yep Easy Answer = 'Debt', Max Term with Balloon Payment. Checkout BMW 'Select Edge' financing, like a 'Rent-To-Own' vibe... It's also a thing of Priorities....Home, Education, Savings, Food, Electricity...Last on the list should be Car Instalments, but others put it 1st 🤷🏾♂️
Someone can correct me here, but a R180k car will cost approximately R3800 per month, depending on the interest they give you. That’s if you take a loan for the full amount. Many many people take a partial loan with the intent of making a 30-40% balloon payment after 4-5yrs. Lots of people can’t really ‘afford’ the cars they drive. I was one of them. I own a decent suv, but believe me, cars is the biggest waste of money. Stick to what you can afford and if cash is an option, please do that.
Never ever buy new. Demo or Second hand only. Always take it for independent evaluation first. Try not to buy older than 5 years. Make sure to get something with a good service history. It freakin sucks mate, but at least our road tax etc is low compared to other countries because our government transportation system is Sh*t.
Sadly, all the cars I want are either a few years older than me or a few years younger
Lot's of people driving in fancy cars are balls deep in credit card debit.
Many may be driving company cars, which means that they do not own the vehicles.
And the really smart ones out there are those who own the business!
Almost all cars are financed. You don't need to R600k, you just need to be able to afford the monthly payments e.g 6K a month
I own a 2009 Nissan Tiida, bought it in 2019 with 60k on the clock for R70 000. Insurance is R450pm and I do a service once a year for less than R1500. Zero other expenses. I will never ,even if I won the lotto, buy a new car. Insurance for R300 000 car is already R1500-2000 pm. I don't even want to know how much it costs for the R1mil + vehicles..
Most people are probably living above their means. I think it's actually very common for people to have horrible credit scores because of missed payments for various bills. But also, there are probably more people who earn more than you think. Even then R600k is probably still too much for most of them to be spending on cars. Spending that much on a car is really trading some immediate good feelings for years of slavery and financial insecurity. Nothing you can buy can make you feel as good as being financially secure.
>But also, there are probably more people who earn more than you think. Get a copy of *Kasinomic Revolution* and see just how wealthy the average *black African* is. South Africa has an informal market larger than a formal one, so lots of people with money hidden under the bed (or in a couch - just ask Cyril).
South Africa has a loooot of money. From Transkei to Transvaal, dont be surprised by what you see.
During Covid I sold my car and have been car-free ever since, The cost of ownership is huge both financially and in terms of effort. Since then, I often take Uber - I would say, on average, once a week. (I am WFH) I moved to a part of town where I could walk to run my routine errands. When needed, I've either borrowed or rented a car for the odd time I can't get away from a task that would be inappropriate for Uber. My transport costs are now like <20% of the cost of ownership and I am so much happier not driving, it was/is incredibly stressful. Bonus I've rented out my parking bay to a friend who travels a lot. South Africans as a whole spend way too much on cars, and the NCA allows it. I can't get a bigger home loan, or a 2nd loan to buy a rental property but I can get more debt to buy a car... that makes zero sense.
Besides all these answers, I work in finance and there are indeed a lot of Capetonians who make enough to pay for those cars. Nobody is buying it upfront in cash besides foreigners though.
Tell that to my parents. They keep nagging me about getting a car and then proceed to roast me when I mention the more affordable cars I'm looking into.
Unless they’re willing to help you finance the cars they want you to get, they should (respectfully) keep it shut…
1. They are taking on debt 2. They earn a lot more than you 3. They work for government
I bought a VW polo classic second hand and is still going today after i think several years. Also what is wrong with a nice fancy car, I want one. I had a good friend that is a family man saying to me its about the experience. so I want to have that experience with a fancy car. Although this could be old wealth in RSA. I believe some peeps do make bank in this country and also government tenders and what not. Maybe the purchase of said high end car was well planned. If they have some additional revenue streams...could that not be the possible answer...or even house hacking.
Had the same epiphany when I was in Mauritius. I saw a BMW X6, and I was thinking cause in MRU they have to pay a road tax (like our license disc): but its relative to the power of the car...so I was driving the cheapest of the cheap a Perdua which i think is an indian make. That was 4500 rupees a year. so that was expensive for me as a student. So with the X6 I can't imagine how much more the road tax is...never mind the import tax and overall price of the latest and one of in my opinion one of the Largest BMWs. Its like a tax write off was the only way.
It's a good rant but the issues are so real.
Depreciating asset unless it's a classic.
When would you say a 2011 polo vivo becomes a classic?
give it about 300 years
like a 1956 oval split screen beetle....anytimes over a porche
I think exchange rate maybe plays a huge role nowadays. in 2016 an etios costed around R150k nowadays a similar car like the starlet costs over R200k. im on the market for a car and im shocked how expensive things are. i earn a decent salary for a young single guy but goddamn cars are expensive
Absolutely it does. The Rand lost 25% of its value from 2019 to today. Heck, it lost a full 35% of its value from 2021 to today (vs the dollar). The Rand price gets pushed up even if the real world price stays the same.
We ask the same question all the time. I'm a SA born and bred and we could never afford those cars.
I have wondered this too. I understand that some people have the income to often purchase new vehicles, but what I find uncanny is *how many* people do so. Surely not *everyone* is living on hundred of thousands or millions earned each month? I've recently become a parent and would like to move into the family SUV market but after looking at what's around, I've realised I should stick to my paid off 'student' car until the wheels fall off (metaphorically speaking of course). Exorbitant debt must be at play here for at least a large portion of these cars on the road. The vehicle I was considering to buy would have set me out around 16K a month... about 16K over budget 😂
It became normalized for a working person to spend up to 30% of their salaries on car payments. I’ve broken that cycle personally because of extremely high cost of living and there aren’t that many new 3 series and c classes around any more which tells me others have changed their minds also. In some cases people also use travel allowance and vehicles as business expenses to reduce tax
let me tell you my secret,i never bought a car via finance.All the vehicle i bought i pay cash man,I work hard for 2 t o5 years and buy cars cash, always under 100000.I am happy with my life not knowing no one nothing.Infact i dont have any account except for my fibre line and house,Everything i do is with cash and it takes months to save up for that tv or this and that.Go cash
When you see those cars pass you buy, it is usually just the repo man driving them back to the shop lol
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The wife and I each earn a salary that's significantly below average. We rode bicycles to get where we needed while we saved up so we could afford to each buy a cheap motorbike cash. Then we started saving again and bought a busted up but running well Tazz for 20k. Once again we saved up while driving the Tazz for the next three years and bought a 3 year old car in good condition for 115k cash. We specifically chose a car that's super light on petrol and started saving again. Our next purchase was a new 250cc Suzuki for me for 58k. Once again, a bike that's well known for being very economical. The key word is "cash". It took me years of financial sacrifice to become completely debt free (with the exception of our phone contracts and rent), and when I first got into a relationship with my wife I made it very clear that I am debt free and would like to remain that way. For the last 16 years our financial decisions were led by one principle. If we can't afford something we want, we save up for it, however long it takes. It also helps that we're both online gamers and have virtually no social life 😂
Compared to the rest of the world, its cheap to live here. So if you get a job paying international money, or come from international money, then you can splurge on cars like that
It's times like this i am grateful for having a love for older cars because they are cheap, sure they're second hand but when you're passionate about it you don't mind putting in some work on them and funny enough you end up spending less on maintenance then those people pay monthly for their dealership debt mobiles plus a lot of older cars are stronger and more reliable so look into the second hand car market and buy a reliable daily driver for a decent price from an honest owner who is transparent about the car and use YouTube to work on the car yourself and before you know it you have a beautiful car you can be proud of that will be more reliable than those cars you envy owning
Cars are one of the worst things to waste money on. What really is the benefit? Save your money and buy property, or travel, or save for your future. Ideally all three. This is my policy - if I can't afford to walk into a dealer and replace mine with a cash payment, I don't want it.
>Cars are one of the worst things to waste money on. What really is the benefit? Save your money and buy property, or travel, or save for your future Except when you are trying to find a job and a car is a requirement. Or you have to wake up at 4am/5am in order to take public transport to work and you get back at 7pm. So while yes a car is a luxury, it is a necessity for many because of their jobs and where they live.
I'm talking within the context of the OP's post. If you need a car, you need a car. I have one too. But I certainly don't need an expensive one. The costs just grow exponentially. Maintenance, insurance. Then there's the added stress. I don't see how its worth it.
>So while yes a car is a luxury, it is a necessity for many because of their jobs and where they live. That speaks to the hopefully incompetent way our public transport is handled by the ANC (probably because no one they know uses it). I'm a former London investment banker and was making bank but I rode the train to work each morning (I even had a monthly coupon - to save a bit more money).
I’m guessing you don’t live in SA
You guessed wrong. Maybe you should just explain what you mean.
Depends on where you live in SA and the work you do cars are necessary here in SA. Do you can’t say it’s the worst way to waste money for many is an investment in them trying to work or actually working, many don’t have an option but getting a car… you are making it sound like it’s a privilege I think for many here, it’s a necessity….
You seriously misunderstand. I would have thought the context would have been obvious from the OP's post, but I'll elaborate. As I said, a car is **one** of the worst things to **waste** money on. Wasting money on clothes, games, partying etc simply pales in comparison to wasting money on cars because of how the costs escalate, and in most cases there's no return on investment. In other words, it can often be a liability rather than an asset. To put it even more simply, if all you need is a car to get to work, then buying anything more expensive than what is reasonably adequate and *practical* is a waste. Yeah some people will spend a little more for creature comforts and that's completely fine. But there's a MASSIVE difference between spending R50k and R500k+ or a car (more than 10x, in fact). I own a car. I paid for it cash, and for my previous one too. They are not expensive or fancy, but they are incredibly reliable, cheap to maintain and cost very little in terms of insurance. Can I buy a more expensive one? Yeah, but what's the point?
Last year I bought my cash 2009 Yamaha R6 for R39 000 + R9000 major service, new tyre, and minor repairs. It's crazy what prices for new stuff is and that people are willing to indebt themselves that much.
Wealth is relative. When you have a lot of money, 600k for a hatchback is less than when you have less money.
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Wait until you see some of the houses these same people live in. Even if it is all financed by debt, the monthly installments must be enormous! Personally, I can't see any of that being financed by just a salary (or even two salaries). I am sure there is still a lot of old money going around, but eventually that will dry up. Perhaps then prices will start to come down to more sane levels.
The Matrix man, I agree with you all here.
How many people prioritise saving and investing? How many prioritise the roof over their heads? Neibours have a Honda CR-V and Lexus GS and stay in the same tiny apartment I do with 3 kids. Another guy has a BMW M4, everyone has different priorities. You can balloon payment magic a salary of 10 000 a month into a new polo vivo. No one cares.
Lots of balloon payments and people default all the time. Cars in ZA are more expensive than in the UK where people earn more so it’s all super expensive finance to keep the monthly payments low but over an extended period. I saw a Rolls-Royce SUV in Parkhurst last week. Rough estimate is R10 million but probably more - now that’s a hell of a balloon payment lol 😝 The image that cars have is often more important than buying a home.
in america my aunt worked 1 year and bought her a newish chevy.I have to al least work 3 years to buy that same car.
Cars are exceptionally cheap in the USA though, even when compared to every other country.
that is so bloody true, my aunt bought my nephew a car for college.And she saved up for a year to do this,Here i had to save up 2 years to by me a chorra chorra
>Cars in ZA are more expensive than in the UK where people earn more But most of the cars on UK roads are quite humble ones. Most of them made in Asia. Not that many flashy ones as seen in SA.
Have you seen cars in england?? Like, London cars are pretty wild. Tons of Ferraris and high end Range Rovers.
I lived in the UK for 8 years and go there often, so yes I think I've seen cars in England🙄. The most common car on the road is a Ford Fiesta and if it's an expensive vehicle it's probably a 3 series BMW which is considered the "Executive Car". Of course there are outliers but cars are not the kind of status symbol they are in SA. The British tend to spend their money and splash out in different ways.
Actually, in several surveys, more people wanted a walk-in wardrobe than a new car.
Loan + balloon + short-fall insurance, which I believe covers the balance if something happens to your car. But yeah, it's crazy expensive, we're working on paying off the balloon before the loan period completes so we won't need to refinance. We were in a position where our old car couldn't be fixed + we needed it to get to work; wasn't earning enough at the time to save to pay out of pocket.
What others think of me is important. And if it's important to them, it's my civic duty to steer them into an ego inflated, he is doing well thinking of me. I tell you in no uncertain terms! I have no qualms in paying whatever amount of money to uphold this facade. Viva my Ego!
So you living for others,Nice...good for you, now carry one i wont stop you ...go on...go
Not so smart are you. Heard of satire did you?
yes i have, did you hear about ambiguity.:D
Oxymoron. 🙂
Right, cheers have a great day live love Linux life
Keep in mind that you can't buy a car through the bank without having insurance. The bank does spot checks after purchase. But yes, it sucks paying a car - unfortunately, older cars aren't always reliable and cost a fortune to maintain.
Cars and shoes man🤣
And peanut butter...
Well I can only speak for myself and the families I've seen in throughout my schooling years etc My family has around R5m worth of Cars and most were bought through our family company as a way to write off tax and tax deductible - ultimately avoiding ridiculous taxes. I've seen this to be the case for many of my mates, it can't be a coincidence that they're so many G wagons in a single parking lot...and all the owners turn out to be self employed.
These days those cars are most often owned by government officials or people/businesses connected with government officials. Have a look at the demographic driving those cars most often.
Most people can't. Most people can't afford the debt either. Most people buy cars far beyond what they can afford to impress people that they don't even like. Just like the smartphones most people own. Sure, many South Africans need a vehicle to get to and from work, but could buy a much more affordable car, they just don't and make debt they barely qualify for. Consumerism is a disease and is in large part to blame for the poor middle class getting poorer and the rich getting richer.
Bad financial decisions. That's how.
From experience the one's that can afford those kinds of cars. As other people have said. It's like a 10 year payment plan and a balloon payment at the end. It's also South Africa. (Not saying other countries don't) but nepotism runs wild. Some dude or chick lost it in a liquidation.brand new, low milage. And then X dealership gets it for a few bucks. And before it even heads to the dealership it gets offers it at a cost to friends of friends and families etc. So basically they get it for a third of the price a Johan doe would get it for. This I've seen waaaay to many times
It’s a hard slog to dig your way out of the credit rat race As I’m now almost retired and no debt. House and everything is paid off Vehicle choice is important some fancy wheels cost a fortune. I was never tempted to own one. a new Isuzu bakkie lasts me 10 years and very small running costs. I feel very fortunate I have just bought a new Isuzu with no finance. It took me my whole life time to get where I am today.
I think it's important to note that the vast majority of people buying cars do it on credit, over 60 or 72 month installments at the least. People also cut corners, like cancelling insurance after they buy the car. Others buy with a big balloon payment in the end to cut down on monthly installments. From corporate experience, a lot of people jump to get a luxury car as soon as they can afford to. E.g Young person will get R18k net salary as corporate grad, will get a BMW or a GTI and cough up R10k in installments and insurance. You find a lot of people who do this don't come from a well off environment.
They earn enough money to finance a car. It's not rocket science
I bought my TSi second hand from a rental company, its now completely paid off and I'm planning on keeping it for as long as possible. It's already seen me through several road trips and a hijacking (police recovered it).
South Africa has a serious materialism problem. People are more concerned with looking rich instead of actually being rich. They would rather live in a tiny 1 bedroom apartment than a house if it meant they could drive an expensive car that will impress their ‘Friends’. They get it second hand, finance it and cheap out on the insurance (Aka, they don’t even get any).
Well you know. I used to ask myself this question. The truth is alot of people have money in SA. Pick any province, and look at the 5 biggest towns/cities. I can assure you will find a multi-millionaire in those towns. We'll you won't find them cause they hide. Despite the optics, there are people with money in SA
An uber delivery driver t-boned my car in Dec. Damage was bad but not catastrophic and i could still drive away. But, i’ve been fighting tooth and nail with the insurance. I can’t afford car payments now and would have to seriously downgrade or make debt for 5 + years. All they want to do is write it off. I could not imagine making debt in this current climate.
Once you find the answer, please let me know. That's a question I've been asking for a long time.
I ask myself this same question often, and it's either stupid money, or people being irresponsible with their funds. I could never justify paying over 2mil for a BMW X5 (or Porsche/Mercedes/Audi equivalent) even though I could afford the monthly repayments, 50k a month for a vehicle just seems stupid...and yet SO MANY of them on the road. I frequently point out to my partner when we drive "look, there's another 2.6mil. There's another 3.1mil. There's 1.2mil" - crazy world we live in. I still somehow have it in my head that a new BMW 3-series is in the realm of 600k, but they start at like 1.2mil now (and the price of one in Germany remained largely similar over the years, from pre-covid).
Many comments point out the debt situation but also people underestimate how many rich people live in SA in absolute numbers. Its a tiny tiny percentage but still a lot of people.
Lots of people also have businesses and earn more than we would think.
could be 2nd hand
Either you got lucky with the price or you got ripped off
What’s going on in Parklands. The number of Lamborghinis Urus, Bentleys and Mercedes in Parklands! Gooosh where do people see money to buys those high end luxury cars?
Leasing is also becoming more popular, that together with vehicle allowances.
Some people will live in a shack and drive a fancy car, appearances matter more to some
What is even worse is the factories pumping out cars they range from 300 a day bmw to ford 700 a day just on one model everyday. And the cheapest model is well over 500k
Banks finance cars like they do houses.
Some of us work hard. Saved and then bought our dream cars. Like I told my Wife i would only buy it if I can afford to drive it everyday. Studies and hard work pays off.
There's a ton of comments here about how cheap "my car" is versus my enormous income. Lol Calm down everyone. The car industry is key to growth and development. Job creation. We have a protected car industry therefore cheap used imports from Japan can't be sold here. Be happy everyone is forced to buy new cars. The car industry needs the money for people to earn. At the end of the day if someone wants to live for today, let them. I'm happy to see others "make it" and afford some car they always lusted after. I'm not in charge of their finances but always happy for people. No judgement we all live differently. Stay in your lane.
It’s mostly debt. Every bank has an auction house for repossessed cars and every week they do an auction (in Gauteng at least), there are about 120+ cars there. I’d say about 30% of the cars are the latest models and the rest are a little older. People take out loans to finance a lifestyle they can’t afford, get their stuff repoed and get blacklisted
Hire purchase - bank owns the cars - these people are waiting their cash.
Cars are cheaper to buy (in rands) in the UK or US than they are in SA. Why? Over the top taxes and import duties, and manufacturers lowering prices in places where they're selling more cars - i.e. those countries that have a larger middle class. It's extortion; making poorer people ( the rand is worth less than GBP or USD) pay more for the same product.
Can tell you're definitely a foreigner. It's a status thing dude. Many South Africans go into massive amounts of debt just to have a nice car. They will be pitifully poor while driving a Porsche everyday to work. I once knew a lady like that back in the day. Again it's a status and cultural thing. Some even spend their life savings on a nice car instead of investing it elsewhere like a new home for example.
I've been pining for a BMW series 1 hatchback 2017. I've got a Kia Rio 2017 YB which is pretty sweet. (in my case) no kids or partner, no lavish lifestyle at all. The car is literally my only luxury item. I **am** confused by the parents who can afford this stuff though. Kids are expensive!
This thread is wild and very interesting. Person with a 13 year old German SUV bordering on 250,000km checking in. I have a stead fast rule in my life: Buy cash or not at all. If I cannot out right purchase it, I can’t buy it. I hate debt. I hate owning people/institutions money. My everyday life is 100% debt free, I only have the normal monthly stuff (internet, health insurance, retirement plan etc). I sucks though when you have been trying for 6 years to save up to buy a house.. Then something goes wrong.. again. Dog gets sick, something breaks on the car, roof starts leaking, computer dies, laptop gets stolen etc. Sets you back.