Sibongile asks: We have a bond and we are supposed to pay R2 000 monthly and we are paying R4 600. We want to buy another car and we can afford to pay R3 000 on it. But we are thinking of using that R3 000 to pay off the bond and only buy the car in the next three years. The car we have is old but reliable with a mileage over 300 000.
Maya replies: As long as your car still gets you from A to B, postponing your car purchase is a good idea. Cars depreciate in value so are not good investments, however your house increases in value so the money you spend on it is growing. I would suggest that you use the opportunity to build up a good deposit on a new car so that when you come to buy one in three years’ time, your repayments are far lower or you can even buy it for cash. This will save you a significant amount of money on interest payments.
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