
GAC Motors recently made headlines when announcing that it was slashing the price of the Emzoom SUV by up to R60,000.
It’s a welcome change of pace given that we are constantly reading about price hikes for new vehicles, and the savings go well beyond the initial payment.
The following table shows how GAC reduced the price of each model in the Emzoom range:
Model | Old price | New price | Price difference |
---|---|---|---|
GAC Emzoom 1.5T Comfort | R469,900 | R419,900 | – R50,000 |
GAC Emzoom 1.5T Executive | R499,900 | R439,900 | – R60,000 |
GAC Emzoom 1.5T R-Style | R549,900 | R489,900 | – R60,000 |
It would be easy to say that buyers are saving R60,000 and call it a day, but considering that more and more households are turning to finance plans to afford a new set of wheels, it’s worth checking how much the price cuts affect the monthly payments you’ll be committing to.
What you’re saving
To work out how much the monthly instalments on a new vehicle are, we can use the following formula:
- Payment term – 60 terms (5 years)
- Interest – 11.25%
- Deposit – 0%
- Balloon – No balloon payment
- Extras – No optional extras
According to these parameters, this is how much a person would have spent on the Emzoom at its former sticker:
Model | Old price | Previous monthly payments |
---|---|---|
GAC Emzoom 1.5T Comfort | R469,900 | R10,370 |
GAC Emzoom 1.5T Executive | R499,900 | R11,026 |
GAC Emzoom 1.5T R-Style | R549,900 | R12,120 |
Swapping out the old prices for the new ones will then show how much consumers will be paying each month from now on:
Model | New price | New monthly payments |
---|---|---|
GAC Emzoom 1.5T Comfort | R419,900 | R9,277 |
GAC Emzoom 1.5T Executive | R439,900 | R9,714 |
GAC Emzoom 1.5T R-Style | R489,900 | R10,808 |
On the base models, motorists are saving R1,093 per month, while the top-end units are saving their owners up to R1,312 per month.
That’s already great news given how tight peoples’ budgets are at the moment, but the savings are actually even better once we factor in the interest payments.
Over a five-year period, anyone who bought the Emzoom Comfort would have spent R622,200 thanks to the 11.25% interest rate – R152,300 more than the initial purchase price of the car.
Following the reductions, the same five-year finance arrangement would cost its owner a total of R556,620, or R65,580 less than before.
In other words, the R50,000 saved upfront actually leads to an additional R15,580 in the bank over the long term, illustrating the importance of securing a good deal if you are planning on using a finance plan to purchase your next car.
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