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4 minute read
14 Sep 2018
8:22 am

Two smart financial decisions I’ve made this year

Moneyweb

I’ll easily be saving more than R20 000 over the next 12 months …

Picture: Shutterstock

With inland fuel prices breaching R16 a litre in July, it doesn’t make sense to be driving anything other than an exceptionally fuel-efficient car.

Sky-rocketing fuel bills, together with changes in ‘life circumstances’, forced my hand.

The first smart decision I made was to sell my paid-off Ford Focus ST and buy a Renault Clio. No matter how advanced Ford’s EcoBoost engine is, the fact remained that the ST had a two-litre turbo engine. This was a performance car. Don’t get me wrong: the performance part was great. But did I really need it?

Car makers play on emotion. It’s difficult, but not impossible, to not fall into that trap.

Cars are nothing more than a utility; a means to get to and from work. To take the dogs to the park. To maybe venture out of town on weekends. Perhaps to drive down to the coast once a year. When you consider a car through that lens, purchase decisions are a lot simpler.

Of course, the replacement car needed to be safe, drive ‘solidly’ and not be completely sluggish. The Clio ticked all these boxes.

Many might call this a downgrade. But with the Clio, my fuel bill (roughly) halved.

There was a secondary benefit to this decision too. The Ford had hit the five-year mark and was starting to become expensive to repair and maintain. The original plan was to drive it for another year or two. But there’s obviously a balance between ‘sweating the asset’ and throwing good money after bad. Last week’s Commandments of a Cheapskate column by the acerbically witty Ingé Lamprecht is a must-read.

The Clio was fantastic.

But life had other plans.

The car wasn’t even six months old when an accident on the way to work one morning saw it written off. In case you’ve ever wondered … airbags are loud! (You don’t ever want to experience that.)

This forced a re-think. Happily there was no ‘shortfall’ to make up, but I needed to find a new car.

The ‘default’ position was just to buy another Clio. But the Vat increase and depreciating rand meant that what had cost around R260 000 in March was now a lot closer to R300 000. I simply couldn’t justify spending that on a car that I use to drive under 200 km a week.

After spending a week or two researching various options, I decided to buy second-hand. You don’t have to swallow the new versus pre-owned depreciation hit, plus any extras on the vehicle are ‘free’. This was the second smart decision (perhaps my first decision wasn’t all that ‘smart’ after all!).

Given its great value-for-money credentials, the second-hand market for Clios is pretty ‘robust’. I had to look elsewhere. I settled on a three-year-old VW Up with 60 000 km on the clock, from a reputable dealer (which meant a full 80 point check and so on).

Not having a service or maintenance agreement is no reason to fret once you realise that the price of these is either bundled into a new car’s purchase price or added as an extra. This means you’re paying off – with interest – the cost of relatively inexpensive services over the first three years of a car’s life. (A number of readers pointed this out in the comments under Friday’s Commandments of a Cheapskate piece.)

Now, the absence of the Clio’s turbo means I need to stay in the far left-hand lane up the climbs on various parts of William Nicol, but the car is a pleasure to drive. And it’s just as safe as the Clio.

I couldn’t believe the mileage I got on the ‘free’ half tank of fuel I got on delivery. This car is seriously fuel-efficient. This tank will average around 5.8 litres per 100 km … in town driving, in traffic! My fuel bill is now even lower. At current prices, the ST would be costing me around R3 000 a month. This Up will cost me just over R1 100, making it a complete no-brainer. Over a year – at current fuel prices – I’ll be saving over R20 000.

Of course, the Up is not the only fuel-efficient one-litre on the market. Practically every automotive manufacturer has a car in this segment. And there are larger utility models big enough for families that aren’t two-litre turbos.

Don’t I feel the pressure to upgrade to the latest German sedan or hot hatchback? Not a chance.

Now, if only I’d made the call to buy second-hand in the first place!

* Hilton Tarrant works at YFM. He can still be contacted at hilton@moneyweb.co.za.

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