If you're looking to finance a car in South Africa, you need to be aware of the minimum income requirements and other factors that will determine your eligibility. To qualify for a car loan, you must typically: be a salaried person with permanent employment, earning a minimum wage of R6500pm; have a valid South African driver's license without endorsements; be a South African citizen or permanent resident; and review your monthly expenses and estimate how much you can comfortably save each month for a car loan repayment. The group noted that the general rule is that you should not spend more than a quarter (25%) of your monthly income on vehicle-related costs. If you have a home loan and can restructure it, you could use it to incorporate the cost of buying a car.
Banks in South Africa generally recommend that you spend no more than 30% of your annual gross salary on a car and that your monthly costs do not exceed 10%. You may need to show some type of savings, proof of income, or advance a large down payment at the dealership. Remember to consider all charges and taxes, including the cost of the vehicle, when determining how much you can spend on a car. Fortunately, there are some general rules, examples of real-life requirements, and other factors to consider to help you understand if you can afford to finance a car.
When it comes to your vehicle, financial specialists recommend that no more than 20% of your net monthly payment be used for car expenses. For those with lower incomes, Wesbank offers what is called graduate funding, where a person must be between 18 and 31 years of agreement, have a higher diploma degree earned within 3 years of applying for funding, earn at least R7,500 per month, and have proof of employment and qualify through of the Wesbank Affordability Agreement. Taking out vehicle financing is a commitment that usually lasts several years, so make sure you choose a loan that meets your needs. There is no set minimum wage requirement to qualify to finance your car in South Africa, but rather it is about disposable income and other minimum requirements. There are several ways to convince lenders that you are able to take on more financing for a car; however, it can take some time and effort.
