VALMA IS FACING RISING EXPENSES AND NEEDS TO MODERNISE HER RIDE
Tired of continual spending with on-going repairs
Valma is in her mid-fifties, is no real car lover and is totally over spending money on seemingly never ending repair bills on her aged vehicle. “Someone told me once the word BOAT means break-out-another- thousand which seems to reflect my situation perfectly with car ownership at the moment. In recent times I have paid out for repairs on the automatic transmission, radiator and the extra’s that went with it and tyres while an air-conditioning pump overhaul is next on the list. And that’s on top of the regular maintenance costs. I really don’t see any point in upgrading to a slightly newer vehicle but then again I don’t want to spend too much on replacing what I currently have” says Valma. She was taught to drive in a manual and only commutes within the City limits on a regular basis with the very occasional drive from Auckland to Pukekohe. Apart from suggesting a suitable replacement, Valma is also asking whether borrowing money to upgrade is a sensible option.
Budget is $18,000
With a lot more transparency in the financial world these days along with low interest rates, financing your way into a newer vehicle is definitely worth consideration. In fact I have noticed finance options in general are becoming a huge part of new vehicle marketing these days.
It’s not unusual to see low or in some cases no deposit advertising and interest rates that follow a similar trend. For some buyers, it could even be worth considering such offers, and not breaking investment accounts which could be still earning reasonably good interest.
Suzuki is a good example. They are currently offering a no deposit and 5.9% interest rate deal, over five years on their automotive range. The financial transparency I mentioned earlier, with this particular offer, highlights the full amount you would pay over that period. So no hidden surprises: it’s all up front and clear. Many of the other new vehicle distributors or their dealer networks are also chasing sales by offering enticing financial incentives.
You’re correct about continually spending money on an older vehicle. It is money never recovered, and a slight move up the sales scale doesn’t get you off the costly maintenance hook completely either.
Buying a new or late model vehicle around your budget however,can mean a no frills purchase but you do automatically pick up some valued safety additions many of the older, more expensive used vehicles don’t have. Plus mechanical warranty, that in some cases can be stretched out to five-years and longer.
Suzuki Celerio Manual $15,990 (plus on road costs)
It’s very easier to find fault with vehicles like the Celerio, but buyers often forget the value for money they can offer, and some of the other benefits. In this price range vehicles usually suffer from excessive noise, vibration and harshness (NVH). But that’s mainly on the open road, and around town they are okay.
The manual transmission also helps overcome any performance issues with the small 3-cylinder 1.0 litre engine. Once again, not recommended for regular long trips, but around town it’s perfect if you don’t mind the extra foot pedal to operate.
A reasonably high seating position also helps with around town driving and parking, well it’s a breeze. The 1.0 litre Celerio can be yours for no deposit and just $75.72 a week (over five years) which may be cheaper to own than your current vehicle. Or maybe pay a little more for the auto or consider the more expensive but popular Swift, starting from $89 per week.
Mitsubishi Mirage XLS $16,990 (plus ORC)
For the extra $1K you pick up an auto transmission and a little more power from the 1.2 litre3-cylinder engine. Mitsubishi also offer an extended warranty which can stretch out to 10 years or 160,000km (whichever comes first).
Three cylinders doesn’t sound that great to have tucked under the bonnet, but for around town driving and the odd trip on the highway it exceeds expectations. And small engines deliver excellent fuel consumption especially around town.
Mitsubishi Motors have a finance calculator on their website. For no deposit and payments spread over 5 years repayments would be $93.11 a week.
Kia Rio EX (2013) around $16k
For similar money to the Mirage and the Celerio you could look at the used market and consider a late model car like the Kia Rio.
New,the EX is over $20K so you would expect,and you receive, a little bit better of everything including NVH. The engine is the more traditional 4-cylinder and 1.4 litre in size so more power at your disposal.
I have driven the Rio recently for an extended period and have no real complaints, especially when driving around town in busy traffic. Used car finance is always available as are extended warranties but offers would depend on individual dealers.
Recommendation
I’m no financial adviser Valma, so I strongly suggest you seek professional advice before committing to purchase. But on the surface it does seem like a good alternative to throwing more money at your old, and no doubt unsafe, vehicle.