I have saved R50 000 and want to buy a car worth R175 000. Should I
1) Pay the R50 000 as deposit;
2) Pay 10% deposit, then pay the remaining amount as my second instalment; or
3) Pay no deposit and pay the R50 000 as my second instalment?
Which of the above options will end up giving me less interest at the end?
George Simitopoulos, director of Carfin Vehicle Finance, responds:
I suggest your second option.
Should you choose to put down a 10% deposit and pay the remainder of the R50 000 as your second instalment, it should shorten your payment term.
This means that your instalment should stay the same, but you will be able to pay off the vehicle sooner than you would have. Therefore, this should save you on the bulk of the interest.
- Fin24
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