Johannesburg - One of the biggest mistakes consumers make is to buy a car on residual, according to National Debt Mediation Association (NDMA) CEO Magauta Mphahlele.
“That is the most expensive way to buy a car and we discourage consumers from buying a car on residual”.
She explained that what often happens is that at the end of the loan term consumers need to have a lump sum to pay for the residual.
“If you don’t have the lump sum the credit provider will offer to re-finance that lump sum which means that you could be paying for that car for seven or eight years.”
Mphahlele said the NDMA consumers who are indebted don’t qualify for re-finance, which means the car will be taken.
Listen to what advice she has to offer:
- Fin24
“That is the most expensive way to buy a car and we discourage consumers from buying a car on residual”.
She explained that what often happens is that at the end of the loan term consumers need to have a lump sum to pay for the residual.
“If you don’t have the lump sum the credit provider will offer to re-finance that lump sum which means that you could be paying for that car for seven or eight years.”
Mphahlele said the NDMA consumers who are indebted don’t qualify for re-finance, which means the car will be taken.
Listen to what advice she has to offer:
- Fin24