Car Instalment Breakdown - Benefits of a deposit and Extra payments to your car loan

What happens if you pay extra on your car loan.

[@itumelenggaoganediwe7567]

Wrong, interest is not a constant at R2k. As your loan maturate the interest portion narrows.

[@MuziSambo]

Yes sir, I wrote "Estimate" on the video for a reason. I've seen my amortisation schedule but I just thought using an estimate will simplify things for everyone.

[@itumelenggaoganediwe7567]

@@MuziSambo Great, you have nice content Muzi.

[@vhakisa]

@@MuziSambo it did for us who listened without the urge to oppose bro. Simple

[@RicoXenn]

@@vhakisa 🤣🤣🤣🤣🤣🦖

[@vhakisa]

@@RicoXenn 🤣🤣🤣🤣🤣🤣

[@11560238]

Great content. Last year I bought my Polo Tsi Comfortline DSG R-Line. I pade 55% deposit and the sales person was against it and I persisted. Then from month one I paid 12 000 towards my car whereas the Instalment was R3769,84. Started getting interest rebates which was super 😎. November I paid off my car and am the happiest girl on earth. I cruise on my R-Line with zero stress

[@Royal-gallore224]

Lol am doing my 2nd year in varsity but am already searching for financial advise😹😹😭

[@langutelanimaluleke321]

WOW GOOD FOR YOU♥♥♥

[@christiandenoyagel8387]

I don't understand... can you make it more simple plz I beg you...

[@11560238]

@@christiandenoyagel8387 a deposit helps to decrease your monthly. Secondly it helps to decrease the amount of interest you were going to pay provided you didn't have a lumpsome for a deposit. Thirdly remember that interest is calculated daily based on the outstanding amount. So when you pay more than what is expected you get what back what was estimated as your interest charges. So when you receive rebate interest, it gets credited(-) on your account. Meaning your debt becomes lower as that rebates decreases the amount of your loan. Remember interest increase(+)your loan amount I hope this makes sense.

[@snowy_sparkly9397]

Can i ask when you do this does the dealership still service your car for free or you pay for the servicing?

[@MoSpaceDig]

Good info here Vusi. Can I suggest a few more topics you can cover: 1) Car and price recommendations for people in different life stages (e.g. 20-30 years old; 30-45 years old; 45-60 years old). As well as if they consider new, demo, or preowned. 2) Budgeting for a car loan in different economic situations/environments (e.g. high interest rate and high inflation vs low interest rate and moderate inflation) 3) Practical servicing and modification tips (e.g. replacing tires to more economical brands or types or changing car fluids and what are the brands for things like oil) 4) When and why you should take out an extended motor plan? What are the costs and the benefits? 5) How insurance works and what are the different types (e.g. full motor insurance, dent insurance, wheel insurance etc)? Keep up the good work 👍🏾

[@starlonerusike5251]

It's a good true that

[@jaymaster103]

Free advice: For young professionals like engineers, doctors and accountants the banks usually offer a private account sometimes called professionals account with the benefit of always getting an interest rate of prime minus 2% for car finance with no credit record required. You just need to apply for it.

[@mfundoradebe6711]

Nedbank users....this is true...ask your banker for assistance with this

[@MuziSambo]

I got prime minus 1% in 2019 for my first car with Absa private banking

[@Matthews_Dintwe]

@@MuziSambo no credit record was required?

[@MuziSambo]

Not at all, I was straight from Varsity.

[@Khanyisani_Bill]

Prime minus? Not Prime plus?

[@jeffryan2177]

I wish when i was 23 years old someone told me how this brand BMW loses value fast. 2020 bought the m3 cs with all the optional extras retail price was 2.6M bought it with 122 km on the clock. I used the car for like 2 months and that time it had 3200 km. i wanted to change it because it was not that powerful and the interior i was over it. I went to sell my car and its value was 1.4M, i was very shocked . I went to 5 different dealers all of them were not offering anything more than 1.8M. Long story short my plan was to pay the car in 3 years and the monthly deposit would be R35 000 with total interest being 140k. I was fed up within 2 weeks i paid up all of that money but funny part is even if you pay before duration of loan you pay full amount of interest. Before buying bmw think about it very well. I have a friend who also bought the G80 M3 and sold it after it drastically lost value. By the way all the best with whatever you doing in life. Never impress people who don’t care about your life /success with things that will be a burden to you. 🙏

[@MuziSambo]

Thanks for the info man🙏🏽 I'm a huge BMW fan and I was planning to buy the 3 series G20 but I think I need to reconsider my decision.

[@jeffryan2177]

@@MuziSambo dont reconsider if its something that sets your soul on fire go for it. The best thing is to buy , keep it for long and also have another car that is a daily driver. What i love about the 3 series of yours is it will never get old . I doubt the next generations of the 3 series will be better than the current one. Thanks again for sharing info that i did not also know about cars.

[@kgothatsoramokgopa2971]

My cousin had a similar BMW experience but she wanted to resell and downgrade within a year or purchasing a brand nee car, only to find the value is equivalent to the car she wanted to downgrade too. So it made sense to keep her car I love the new 1 series, really want it but I don't have the luxury of paying off a car in 3 years if I don't like it. I will be stuck with it for the period of the contract

[@pvcegd7554]

i don't have a car but i feel really informed and prepared thank u

[@BenjaminMalatji247]

I appreciate guys like you who takes interest in teaching others what you believe it's important.

[@SKIKR]

Strong honest truth!! Well done on this content, its much needed. I wish you the best on your property endeavors and have fun chasing the dream, may it come to pass. Congrats doc.

[@anthonymbele769]

Your videos are informative with no suger coating great job bro thats what consumers want

[@vuyisananitshika5815]

Very insightful car information in a Mzansi Contexts. Bravo Muzi you doing this thing effortlessly. Keep it up.

[@mitchmona3431]

You are so so entertaining bro🤣🤣🤣... I love your energy

[@kopanokgomotso3534]

You are genius🤣🤣 love your shade and content 🔥🔥

[@skomenphakathi8859]

Thank you for the information Muzi 🙏 I'm starting my own channel all thanks to you.

[@ituleo697]

Thank u Prof, I’m learning a lot now I’m ready to buy G63 😜😜. Thank you for this wonderful content….

[@humbulanimurabi7585]

The best in this.. simple and straight to the point..🔥🔥🔥

[@snipersky2482]

Thank you so much I have just started to pay extra this month and I didn't know i was suppose to tell the bank to either reduce installment or reduce loan term. thank you so much I will do on Monday

[@thembimsani280]

Thank you so much Muzi for opening my eyes . August I was planning to buy a car with zero deposit but I’m no longer going to the garage . Let me keep on saving up until I have 230k as a deposit of my car . Thank you so much for this fruitful information

[@siyazzito7495]

Love your content my brother ❤️ and i needed this advice ✌️❤️

[@yenalowemgodi5671]

🎈🎈🎈🎈💯 These are for your Birthday bro. Have many blessed ones with lots of money to get that G20 and many more subscribers to learn from your content! 🚀

[@thabisomashishi6234]

Very imformative, Tnx

[@lethabomoreroa5259]

How much of a deposit would you recommend towards buying a car, say 2022 R-line for example?

[@monkisethojane2218]

Great video thank you for the advise

[@borismkhwanazi583]

Wow thank you great info

[@moonwalk6404]

I didn't hear a thing you said I was too in love with the Mzansi Edition😍😍😍

[@MuziSambo]

😂😂😂Next time I must just put a blank screen💁‍♂️

[@tsakilemathonsi5517]

Great advice

[@kamogelokg5330]

very helpful, thank you

[@nhlanhla.vchili960]

I think reducing the monthly installment is good, it makes your budget to breath and you can even increase those extra payments.

[@nevermajola4402]

How much it's cost monthly for bimma M3 computetor , aka the drain

[@leeroyndlovu7983]

This is some very good information bro. I was just gonna be paying extra without it doing anything for me 🙏

[@ST-xx9pn]

Not with all banks ,some banks your extra cash go straight for capital reduction without you informing them.

[@bonketshwane98]

another learning day

[@othabetswepoo5744]

This was important, especially the last part about contacting the bank to update them about my upfront payments. I think I’ll ask them to reduce the payment period, rather than reduce my instalment amount

[@mcn_zn]

😭Not me getting excited thinking you were gonna tell us you finally bought the BMW

[@MuziSambo]

😁😄We still have a long way to go...we're not even halfway yet🤷‍♂️

[@smisomazibuko7625]

Dr. Please recommend which one you prefer reducing between the term and monthly installment?

[@vhakisa]

Educative stuff. Lol do we have people here who still call "fixed deposit accounts" investment accounts?🤣🤣🤣🤣🤣

[@MrMoss786]

Very informative 👏 thanks. Can you factor in the rate of increase or inflation in New car prices against taking loan out for longest period possible with balloon payment. Eg a balloon payment today of R100k today is probably only effectively R60k after 72 months.

[@briansabwe1005]

Just a little correction. You won’t be paying an interest amount of 2283.91 every month. That is the interest paid for the period for which your statement relates to. Interest is calculated on your outstanding balance and that’s why you will see the interest amount going down each month if you continue to decrease the outstanding balance through monthly repayments.

[@briansabwe1005]

I’ve just seen in the chat that you’re aware of this. My bad.

[@thatopelle5485]

Muzi may not know how this works but I thought paying more over your instalment was beneficial. how does one go about structuring extra payments with the bank? so that the money isn't deemed as an extra payment but a contribution to settling your car quicker and and low interest?

[@kukrikukemoer4956]

Love your content

[@melvilsiwele5779]

Thanks man for the information... Can you also explain advantages and disadvantages of guaranteed future value

[@MuziSambo]

I will cover that when I do a video about different car finance options.

[@melvilsiwele5779]

@@MuziSambo thank you 👌

[@brucevandermescht6957]

Actually making advance payments reduces the interest charged on the financed amount so it is a good thing to let it accumulate since you will literally be reducing the portion every month with that extra payment that the bank can charge you interest on. It doesn't just sit there and "do nothing" bro.

[@sbongakonkekheswa1606]

Hi Muzi.I'm looking to buy a half ton bakkie that worth 119 000 with finance. I have 30 k saved aside. My question is if I want to reduce the monthly instalment, do I pay that 30 k as the deposit or I pay it later as I continue with the instalment?

[@netlity5532]

What blue colour code is that? Anyone please help. I need to paint this type of blue colour on my car.

[@zwivhuyan]

Dr Muzi Are you trying to tell us something about the 3 series i saw you say if you get to 50k subscribers you will get it mara tell us if the car we seeing is already the people's car lol non the less we are proud of you my guy.

[@MuziSambo]

😊We are not there yet...the struggle continues✊️

[@pikolomziqaba196]

As one pays extra every month towards their car. Which one is best to do... To tell the bank to reduce installment or terms period? Which one would work great for individual needs? Thanks

[@shamisomarabwa202]

I'd opt for reduced premiums to avail me more liquidity

[@kenzooo1000]

Ola Muzi, mfowethu mina nezi mpinchi are going 4x4 off roading this weekend mfowethu. Ngi cela uku ku mema if o available mfowethu, ngi cabanga unga yi thanda le content ya lapho.

[@MuziSambo]

That's really a great opportunity but I can't make it in such short notice. Niyaphi vele if I may ask?

[@kenzooo1000]

@@MuziSambo Ola siya e Sandwani lodge, want to change your perspective nge Ford Ranger.

[@mfundomadondo7864]

Mr Sambo what are the advantages and disadvantages of buying a car cash?

[@MuziSambo]

Advantages 1. You have negotiating power when you're buying a car cash. Dealerships are often willing to give you discounts if you're buying cash because they know they can close the deal with less admin. 2. It is not a must to have comprehensive car insurance when your car is not financed. 3. You pay NO interest. 4. You eliminate the risk of your car being repossessed if you encounter financial difficulties in future. Disadvantages. 1. Opportunity cost...Imagine buying a R500 000 car cash! That’s money you could've invested in some serious money generating assets which were gonna give you money to pay for the monthly installment of your car. These are just the few points I could come up with from the top of my head🤷‍♂️

[@mfundomadondo7864]

Thank your sir, very much appreciate it.

[@kutloskietlalisto3926]

Danko Muzi . Even tuks should call you senganga

[@MuziSambo]

🙌The punchline😂😄

[@kutloskietlalisto3926]

@@MuziSambo tell me lets say i have R300k lumpsum to finance a golf gti pay it once off in advance but i only want to keep the car until 300k is depleted and take it back . Can such an arrangement be made

[@kutloskietlalisto3926]

Say i want keep the car for 1 year 2 months

[@MuziSambo]

@@kutloskietlalisto3926 What you're talking about sounds more like a lease agreement...You take the car and sort of only finance the "depreciation", it is more like renting the car. At the end of the term you can either give them their car back, refinance or just settle the car to own it.

[@kutloskietlalisto3926]

@@MuziSambo thank you Brother

[@ExcellentLeoSilinda]

Would you say it's wise to take a balloon payment on the car loan. Then instead of paying a big deposit initially, you pay out the balloon payment? (assuming in just a few months after purchasing the car)

[@MuziSambo]

To be honest there’s no perfect way of financing a car. It all comes down to personal preference, that’s why every individual is given the option to structure their loan the way they want. I personally prefer to pay a big deposit upfront because that gets me a good interest rate and lowers my monthly instalment...that's just my preference🤷‍♂️

[@Dav973jack]

It's never wise to choose Ballon payment.. A deposit sets and paves your way..

[@kaborong_sedibe]

Polo gti is over 6k pm.. yohh as a person who doesn't know cars this is a shocker to me😅😅

[@zanedunn3621]

Imagine that fixed deposit argument when the max you get in a fixed deposit is 6% if you lucky and even at prime the interest on your vehicle finance is 7.75%. People like to give terrible advice and the sad part is many of us don’t do our homework and take eveything at face value. Shame.

[@ThabisoRatlou]

Worst of all you have big brother called inflation who will wipe out all that return within a flick. If you want fixed deposit to work for you, You need at least nominal interest of 9%. Fixed deposit is a scam literally.

[@ThabisoRatlou]

People do similar things with an account offered by that blue hardware store.

[@luvuyozwayi9796]

for me ,if the deposit wont reduce the rate , I don't pay it.

[@zanedunn3621]

@@luvuyozwayi9796 something significantly wrong with your credit score for a deposit not to positively affect your rate but I see your point

[@katlegomogane6697]

When you pay your car loan upfront the money is registered as advance payments and you can use it for payment breaks if you run into problem in future. However, you do get interest rebates that are calculated based on the advance amount without changing your monthly installment. This, ofcos, given you send your proof of payments to the bank.

[@MuziSambo]

100%👌It is of utmost importance to ensure that you communicate with the bank whenever you make extra payments. You don’t just throw in money and expect things to happen automatically.

[@maykay383]

Oh thank you was wondering how the interest rebate comes in

[@namtrader9674]

The way German cars depreciate (except Mercedes) is ridiculous. I'll rather save and buy the car cash after 5 years.

[@MuziSambo]

Inflation!💥

[@danzulneib1243]

Just buy it cash

[@luvuyozwayi9796]

Nice content bro, I don't understand when you say interest is front loaded on a car loan. in my understanding of finance, interest is calculated on daily basis on outstanding capital amount. if you make extra payment that payment will reduce the capital amount thus reducing the interest charged

[@MuziSambo]

What you're saying only applies on simple interest loans but the story is different on precomputed interest loans. Try to Google "precomputed interest loans" hopefully you can find some clarity there.

[@phiwenduli7304]

If you have a contract with precomputed interest and plan to pre-pay your loan early in full or make larger payments in advance of your regularly scheduled amount, you will not get the same reduction in the interest charges that you would if your contract had a simple interest rate.

[@tmtmolokwane6357]

Eeeeeeh ndoda bdid you see what BMW did to your car?.....check out the facelift 3 series.... Spoilers Alert: I like the outside but ...eeeh 😨😨that's where I stop.

[@rofhiwathomasnetshandama1597]

First to comment

[@colinwordley4369]

Not sure about making an extra payment, but i am with standardbank, and every time i increase my monthly repayment, they show me how much i have saved in interests.

[@lionelmedico]

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