Results 1 to 9 of 9

Thread: Vehicle purchase

  1. #1
    Diamond Member
    Join Date
    Apr 2010
    Location
    planet earth
    Posts
    3,943
    Thanks
    153
    Thanked 317 Times in 287 Posts

    Vehicle purchase

    My van is paid off and i need to upgrade, to a bigger van, the caddy is just tooo small for the construction side of the bussiness. My plan is to keep the caddy for the specialised testing services.

    I am considering an H1,2.7 diesel, very difficult to find, or a VW crewcab,2.5 lt both should be VAT deductable. Anyone have any good or bad things to say about these vehicles?

    Dont want to get into HP debt again, but for tax and vat reasons it might not be a bad idea to make a purchase.

  2. #2
    Diamond Member Blurock's Avatar
    Join Date
    May 2010
    Location
    Durban
    Posts
    4,151
    Thanks
    758
    Thanked 886 Times in 735 Posts
    Blog Entries
    7
    One should not pay unnecessary interest, but with interest rates as low as it is, it may be better to go for HP and keep the cash in your business. Your business should be able to generate a higher return than the interest the bank charges. (Opportunity cost). The interest is tax deductible any way.

    Once you have spent the cash you can't get it back. We all know how important cash flow is for a business.
    Excellence is not a skill; its an attitude...

  3. #3
    Silver Member
    Join Date
    May 2010
    Location
    durban
    Posts
    419
    Thanks
    128
    Thanked 61 Times in 52 Posts
    Do keep in mind that you may claim vat that has been paid on the purchase price, and when you sell a few years down the line, you would pay back the vat at the selling price.

  4. #4
    Diamond Member
    Join Date
    Apr 2010
    Location
    planet earth
    Posts
    3,943
    Thanks
    153
    Thanked 317 Times in 287 Posts
    Thanks for reminding me, i think i will just keep the caddy van for fishing.

  5. #5
    Email problem
    Join Date
    Jan 2013
    Location
    Kempton Park
    Posts
    2
    Thanks
    0
    Thanked 0 Times in 0 Posts
    Hey guys! I am new to this forum. I just bought a Hyundai i20, their new 1,2 model. I am very proud, I do not have the car yet, I am getting it tomorrow or Thursday. For the first time in my life, I will be driving a brand new car. a 2013 model also! But that aside....

    To afford the car, I took a 30 residual. I have never liked a residual but I did it any way. My question is. while that 30% residual is sitting there, does it accumulate interest over and above the total interest that I pay? And can I pay extra a month to reduce the residual?

  6. #6
    Diamond Member Blurock's Avatar
    Join Date
    May 2010
    Location
    Durban
    Posts
    4,151
    Thanks
    758
    Thanked 886 Times in 735 Posts
    Blog Entries
    7
    Quote Originally Posted by Woogie View Post
    To afford the car, I took a 30 residual. I have never liked a residual but I did it any way. My question is. while that 30% residual is sitting there, does it accumulate interest over and above the total interest that I pay? And can I pay extra a month to reduce the residual?
    A residual is something that you take when you can't afford the car, but you'll take it any way. You are lucky that the interest rates are currently on a low, but it could be damaging when interest rates rise again.

    Interest is calculated on the total outstanding amount, but you only service 70% of the debt. The rest accumulates and you will be sitting with a debt of R43, 470 at the end of the term. You will then have to refinance this amount and pay even more interest.

    The difference in repayment is roughly R600 per month, so is it really worth it? Paying more per month will not reduce the interest as the bank will not recalculate the interest on ad hoc payments.

    Buying a new car may not be such a good idea after all. You could have bought a 1600 demo with extras and 6500km on the clock for R149k.
    Excellence is not a skill; its an attitude...

  7. #7
    Silver Member
    Join Date
    Sep 2008
    Location
    Cape Town
    Posts
    466
    Thanks
    81
    Thanked 69 Times in 62 Posts
    Quote Originally Posted by ians View Post
    My van is paid off and i need to upgrade, to a bigger van, the caddy is just tooo small for the construction side of the bussiness. My plan is to keep the caddy for the specialised testing services.

    I am considering an H1,2.7 diesel, very difficult to find, or a VW crewcab,2.5 lt both should be VAT deductable. Anyone have any good or bad things to say about these vehicles?

    Dont want to get into HP debt again, but for tax and vat reasons it might not be a bad idea to make a purchase.
    Might also be worth looking at the Dahatsui Gran Max - also a one toner with drop sides - but a bit shorter that the H1. The Gran Max has a tiny turning circle, great for parking and think it would make a better inner city delivery van - the H1 would probably be the better "construction" van.

    Had my Gran Max for over a year now and very happy with it.

  8. #8
    Moderator IanF's Avatar
    Join Date
    Dec 2007
    Location
    Jhb
    Posts
    2,679
    Thanks
    197
    Thanked 529 Times in 405 Posts
    Hi Woogie
    My daughter just bought her first new car as well, an i20. What she loved it was on her own with no surety from dad. What we did establish is you can pay in extra on your monthly payment, so when you can pay in extra. As for the residual I would guess interest is factored into the residual so paying off extra should reduce total repayments. But check carefully with the dealership.
    Anyway congrats on your new car enjoy it.
    Only stress when you can change the outcome!

  9. #9
    Diamond Member
    Join Date
    Apr 2010
    Location
    planet earth
    Posts
    3,943
    Thanks
    153
    Thanked 317 Times in 287 Posts
    Well i have decided to go for the VW crewcab, 2.5 diesel, second hand, waiting for finance approval, that could be interesting. I hear i can claim back the vat.

    Thought about getting a bakkie, but after owning a caddy panel van, i dont think i will ever buy a bakkie for bussiness use ever again. Since i started my bussiness i have always just bought bakkies, because everyone buys bakkies. I hear if you are involved in an accident with staff in the back of a biakkie or the back of a panel van without seats, it could be rathetrtricky trying to claim from workmans compensation.

    H1 has proved to be a challenge trying to find a 2.7 diesel, the other problem apparently is when the service plan is finished.

Similar Threads

  1. Replies: 3
    Last Post: 15-Jul-12, 02:07 AM
  2. Business Purchase
    By Abdi in forum General Business Forum
    Replies: 6
    Last Post: 10-Nov-11, 08:05 AM
  3. petrol purchase
    By murdock in forum Scam Alert Forum
    Replies: 19
    Last Post: 08-Nov-11, 05:53 PM
  4. [Question] Residual Car Purchase
    By AmithS in forum General Business Forum
    Replies: 3
    Last Post: 15-Oct-10, 09:46 AM
  5. [Article] Media statement on reports on purchase of official vehicle for use by the deputy mini
    By BBBEE_CompSpec in forum South African Politics Forum
    Replies: 2
    Last Post: 14-Dec-09, 03:31 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •