Do you owe more on your car than what it is worth? If you do, then you are ‘underwater’, and according to Chantellé Henning, the head of finance and insurance at getWorth, this is very distressing.
She recounts a recent case. “A client needed to sell his premium 2022 model car, valued at R500 000. However, he was shocked to discover he still owed R700 000 on it, despite making payments for two years. “Currently, used car prices are dropping again, meaning selling a car might not generate enough to cover your loan, leaving more people underwater.”
Consider buying a used car instead of a new one. New cars depreciate significantly in the first year or two, while used cars generally hold better value.
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