How Much Should You Spend on a Car? A Cash-Only Guide

Buying a car doesn’t have to be a financial headache. Forget the flashy ads and smooth-talking salespeople—there’s a smarter way to roll. Stick to these simple rules: don’t go into debt, buy what you can pay for in cash, and keep your total spending on anything with wheels under control. Here’s how to make it work.

Rule #1: No Debt, No Stress

A car loan might get you behind the wheel faster, but it’s a chain around your wallet. Interest piles up, and before you know it, that R200,000 bakkie costs you R250,000—or more. If you can’t pay cash for the car you want, don’t buy it. Debt isn’t freedom; it’s a trap. Instead, get the car you can afford today and save up for the one you dream about. Patience pays off.

Rule #2: Cash Is King

If your bank account says R150,000, that’s your car budget—full stop. Want a R300,000 SUV but only have R80,000? Grab a reliable R80,000 hatchback and stash the rest away until you hit your goal. No monthly payments, no sleepless nights—just a car you own outright. South Africa’s got plenty of solid used options; a 2020 Toyota Hilux or VW Polo with low mileage could be yours without a loan shark in sight.

Rule #3: The 50% Cap

Here’s the hard limit: don’t spend more than 50% of your annual income on all your vehicles—cars, bikes, boats, anything with an engine. Earn R1,000,000 a year? Your total vehicle budget is R500,000. Got a R300,000 car already? That leaves R200,000 for a motorbike or a second ride. This keeps your money working for you, not just sitting in a depreciating heap of metal.

Why This Works

• You Own It: No bank can repossess what’s already yours.

• Less Waste: Cars lose value fast—why pour borrowed money into something that’s worth less tomorrow?

• Freedom to Save: Cash buys you a car today and a better one later, without interest eating your savings.

Making It Practical

Say you earn R600,000 a year. Your max vehicle spend is R300,000. You’ve got R120,000 in the bank right now. Skip the R300,000 Land Cruiser and snag a R120,000 Ford Ranger. Drive it, love it, and save R10,000 a month. In 18 months, you’ve got another R180,000—enough to trade up to that dream ride, debt-free.

Need a family car but cash is tight? A R100,000 Kia Picanto or Hyundai i20 can haul the kids around while you build your stash. It’s not about flexing—it’s about winning long-term.

Watch the Hidden Costs

Even with cash, a car’s not free to own. Factor in:

• Fuel: Pick something that sips, not guzzles—especially with petrol prices bouncing around.

• Insurance: Shop around; a cheaper car often means lower premiums.

• Repairs: Older cars might need more TLC. Budget a little extra or buy something with a service history.

Avoid the Temptation

Dealerships will dangle shiny upgrades—leather seats, big rims, fancy tech. If it’s not in your cash pile, walk away. Same goes for keeping up appearances. Your neighbor’s new Merc isn’t your problem. A car gets you from A to B—it doesn’t define you.

A Quick Checklist

1. How much cash do I have right now? That’s your budget.

2. What’s 50% of my annual income? That’s your total vehicle ceiling.

3. What do I need—space, reliability, efficiency? Buy that, not the fantasy.

Earn R400,000 a year? Your limit’s R200,000. Got R50,000 saved? Start there—a solid used Nissan Almera or Mazda 2—and save for the next step. Simple.

Final Word

Spending smart on a car means staying in control. No debt, no overreaching—just a ride you can afford and a plan to level up. At www.kings.co.za, we’re all about living like royalty without selling your soul to the bank. How much are you spending on your next car? Let us know below!

Check out more money-savvy articles at www.kings.co.za because real kings build wealth, not burdens.