What is the minimum salary to qualify for car finance in South Africa?
Are you considering car ownership in South Africa but unsure about your financial eligibility? About 30% of households own a vehicle, which highlights transportation access challenges for many. As the economy grows, efforts to improve car finance options are expanding. But what is the minimum salary to qualify for car finance in South Africa?
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TABLE OF CONTENTS
- What is car finance?
- What is the minimum salary to qualify for car finance in South Africa?
- Who qualifies for car finance in South Africa?
- How much do you need to earn in South Africa to buy a car?
- What is the minimum credit score to buy a car in South Africa?
- What are Wesbank's car finance requirements?
- What are Standard Bank's car finance requirements?
- FAQS
Car ownership costs in South Africa have surged by 48% in four years, now consuming 45% of the average salary. With rising fuel, insurance, and maintenance expenses, affordability is crucial. This guide outlines the minimum income requirements, key documentation, and financing options to help individuals secure affordable vehicle ownership.
What is car finance?
It encompasses various options for borrowing money to purchase or lease a new or used vehicle. It involves obtaining a loan from a financial institution, which the borrower repays monthly over a specified period.
What is the minimum salary to qualify for car finance in South Africa?
To qualify for automobile finance, the minimum salary typically ranges from R6,000 to R10,000 per month, with many lenders requiring at least R6,500.
Insurance Manager Allesha Chetty suggests R7,500 as a more common threshold. In an attempt to know the duration before car finances are approved in South Africa, as reported by JustMoney, she said the following:
It can take as little as an hour to have your vehicle finance pre-approved. However, final approval can take anything between three hours and three days, depending on whether you provide all the correct documents that your vehicle finance provider requires.
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Who qualifies for car finance in South Africa?
A specialised set of people do. But to qualify for automobile finance in South Africa, applicants must meet certain requirements and provide specific documents, including the following:
- Citizenship and credit history: Applicants must be South African citizens or permanent residents. Positive credit history is crucial, as lenders will review past borrowing and repayment behaviour.
- Age requirement: You must be at least 18 to enter a financial agreement.
- Employment status: A stable income, typically from permanent employment, is necessary to demonstrate repayment capability.
Documents required for car financing
Even when you are eligible to get financed, there are documents you must provide. These include the following:
- Proof of identity: A valid South African identity card or green barcoded ID.
- Driver’s license: A copy of your driver’s license, both front and back.
- Proof of residence: A utility bill or statement confirming your residential address, not older than three months.
- Proof of income: Payments from the last three months are required for salaried employees.
Self-employed car finance requirements
For self-employed individuals seeking car finance in South Africa, specific documentation is necessary to demonstrate financial stability. They are enumerated below:
- Bank statements: Stamped statements for the last three to six months.
- Financial statements: Detailed income and expense reports.
- Credit history: A good credit rating.
- Tax clearance certificate: Proof of tax compliance.
- Identification and business registration: Valid ID and business registration documents.
- Business plan: A solid plan may be required.
- Collateral: This may be needed to secure the loan.
- Deposit: This is often required.
- Comprehensive insurance: Proof of vehicle insurance.
Having these requirements and documents ready can streamline the application process and enhance your chances of approval for car finance in South Africa.
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How much do you need to earn in South Africa to buy a car?
Lenders typically require a minimum monthly salary between R6,000 and R10,000 to buy an automobile in South Africa. It is also advisable to avoid spending more than 25-30% of your income on vehicle-related costs.
For example, if you earn R20,000, your total vehicle expenses should remain below R5,000. Banks generally will not finance loans under R100,000 or automobiles older than ten years.
What is the minimum credit score to buy a car in South Africa?
According to Everycent, the minimum credit score is typically around 600 but may vary by lender. A score near this threshold could classify you as a high-risk borrower, resulting in higher interest rates or larger down payments.
What are Wesbank's car finance requirements?
Wesbank's minimum salary requirement for automobile finance is R7,500 per month. Applicants must be aged 18 to 31 and hold a degree or higher diploma completed within the last three years.
Proof of employment and meeting Wesbank's affordability criteria are also necessary. Those earning above R6,500 can consider Wesbank's graduate finance option.
What are Standard Bank's car finance requirements?
According to their official website, the bank's requirements for car finance begin with a minimum monthly income of R8,000 and a minimum loan amount of R50,000. Applicants can choose payment periods ranging from 12 to 84 months. Credit assessments will be conducted before approving the application.
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FAQS
Many individuals aspire to own an automobile in South Africa, but financing options can be complex. Below are frequently asked questions about car finance, along with clear answers.
- How much must you earn to qualify for a car in South Africa? To qualify for car finance, earn at least R6,500 to R10,000 monthly.
- What is the minimum salary to buy a car in South Africa? It starts at around R6,500 and goes up to R7,500 monthly, depending on the lender.
- Can you get car finance if you earn R5,000? It may be possible to get car finance if you earn R5,000, primarily for purchasing second-hand automobiles valued at around R125,000.
- What car can you buy for R7000 per month in South Africa? You can afford second-hand vehicles valued at around R150,000, depending on loan terms.
- Can you buy a car with a credit card in South Africa? Purchasing an automobile with a credit card is possible but not common due to fees and limits.
- Can you buy a car on a loan in South Africa without a payslip? A payslip is not mandatory if you can provide other proof of income.
- Can you get a loan if you are self-employed in South Africa? Self-employed individuals can obtain loans, provided they demonstrate stable income and a solid credit history.
- Can you buy a car if you earn R10,000? The cheapest new automobile, the Suzuki S-Presso, costs R169,900, resulting in a monthly payment of around R3,130.
The minimum salary to qualify for car finance in South Africa generally starts at R6,500 per month, though this may vary by lender. Meeting income and credit criteria enhances your chances of securing favourable finance options.
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Knowing how much doctors earn in South Africa can help a professional who plans to work there. The report details their monthly and annual salaries.
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