Buying a used car is a big financial commitment, and while it’s often more affordable than buying new, there are important costs to consider beyond just the purchase price. Whether you’re a first-time buyer or not, budgeting properly ensures you avoid nasty surprises down the line and keep your finances healthy.
Here’s a practical breakdown of how to budget for a car purchase in South Africa, including those often-overlooked expenses.
Work Out What You Can Afford
Before you start browsing listings, be realistic about what you can comfortably afford. Avoid stretching your budget to its limits, you still need to factor in running costs, insurance, and unexpected expenses.
A good guideline:
- Keep your vehicle repayment under 20%–25% of your net monthly income.
- Avoid balloon payments (they shift financial risk to the end of your loan term).
- Make sure you will have room in your monthly budget for other car-related costs like fuel, insurance, and maintenance.
Knowing what you qualify for makes shopping for a car much easier. As a private-to-private finance specialist, we at Motorlease submit your application to all major banks, negotiate the best possible interest rate, and structure a deal suited to your financial situation.
When Might a Deposit Be Needed?
In most cases when financing a used car in South Africa, a deposit isn’t required. However, there are exceptions where a bank may request a deposit:
- If the vehicle’s selling price is above its recommended retail value
- If the car is considered higher risk (very old, high mileage, or modified)
- If your credit profile or risk factor requires it to secure the deal
In these cases, a deposit reduces the loan amount the bank needs to finance, but it doesn’t necessarily secure you a better interest rate.
Don’t Forget the Additional Costs
Buying a used car involves more than just paying the seller. Factor these expenses into your budget, not all of them would be relevant to your vehicle purchase:
Once off costs
- Finance Facilitation Fee / Dealer on the road fees
- Bank initiation fee if you purchasing the vehicle with bank finance
- Roadworthy Test Fee (compulsory for change of ownership to take place)
- Registration fee which is the change of ownership fee at the traffic department
- Vehicle Inspection Costs (independent inspections are highly recommended)
Monthly Running Costs to Budget For
Once you own the car, there are ongoing costs you’ll need to budget for.
- Comprehensive Insurance (should be activated before collection)
- Yearly Service or Minor Maintenance Repairs (if needed)
- Tracker Installation (some banks require this before releasing funds)
- Fuel and oil when needed
- Annual License Renewal
- Tyres (especially important with used cars)
- Car Wash and Valet
Budget for at least 10%–15% of your car’s value per year for maintenance and upkeep.
Final Thoughts
A well-planned budget is the difference between enjoying your new car and being caught off guard by expenses you didn’t expect. When you work with a reputable finance facilitator like Motorlease Vehicle Finance, you benefit from:
- Access to all major banks through one application
- Negotiated, competitive interest rates
- Honest, transparent advice (we’ll tell you when a deal doesn’t make sense)
- Full management of the finance and transaction process, protecting both buyer and seller
Buying privately? Talk to us first. We’ll help you budget smartly, avoid costly mistakes, and structure a deal that suits your long-term financial wellbeing.