Many SA motorists who are feeling the burden of inflation, soaring fuel prices, the recent repo rate hike and 2018’s VAT increase are now considering moving to more cost-effective cars. A simple switch from an expensive gas guzzler to an affordable runabout might seem like a wise move, but the transition alone can be costly and there’s certainly an optimum time to trade in a car which motorists should bear in mind. Lower monthly repayments and fuel bills will ease the pressure on household finances, but significant losses can be made by trading a car at the wrong time. The best time to trade in a vehicle is when the trade-in value is in line with the settlement amount owed to the bank it’s financed with. This is called the breakeven point, and trading in before this time could see a consumer paying in just to get out of the finance contract. In other words, if your car’s trade-in value is R200,000 but you owe the bank R250,000, you’ll be required to come up with R50,000 just to make...

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