Many South African keep a close eye on the Rand/Dollar exchange rate. Some of us want to know as our investments and other e-commerce exploits depend greatly on the exchange rate. However, many people don’t know what effect the Rand/Dollar has on your car’s expenses!
This is the obvious one. As the Rand/Dollar goes up, the cost of oil goes up meaning that our petrol price will also go up.
We have all grown accustomed to annual increases in our insurance premium. This is mostly to remain in line for inflation. However, with drastic exchange rate changes, insurance premium hikes may need to take place more regularly. Why is this? The cost of replacement changes.
With a higher Rand/Dollar exchange rate, the cost of importing car parts goes up greatly. This means replacement parts will cost more to bring in to the country, costing the user more.
As the Rand fluctuates so does the Base Interest rate. This means, if you don’t have a fixed interest rate, your monthly instalments could also increase significantly.
As scary as all this sounds, there is light at the end of this tunnel. The Rand has had greater lows than it does to date. We as South Africans have always worked hard to get out the other side.
Feel free to contact Carfin online if you would like additional information on fixed interest rate car finance and car refinance. One of our expert consultants will give you a call and discuss what vehicle finance option is best suited for your needs.