How to purchase a car on a graduate’s average starting salary

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How to purchase a car on a graduate’s average starting salary
SPOILT FOR CHOICE: South African graduates no longer have to worry about a low credit score when buying a car after leaving varsity. PICTURE BY Better.net

Many factors can influence how you start out in life after varsity, one of them is choosing a car that’ll meet your needs as well as fit in your budget.


So you’ve finally left the world of studying and are starting out your new career. This is a major milestone as it signifies your growth and adulthood. A stage in your life where you can make your own income and finance the life you envision for yourself. And while stepping into this stage of your life gives you endless possibilities and freedom, not owning a vehicle can put a damper on things. 

Transportation in South Africa isn’t reliable and can be frustrating when you wish to travel to and from work, and during the weekend. This realisation has made you consider the perks of purchasing your own vehicle.

And while it is expensive, owning a vehicle does have it’s advantages. It’s a safer form of transportation, gives you the freedom to travel, and you don’t have to rely on others. But, for someone who has a starting average salary and a low credit score, it can seem impossible to get car finance in South Africa. 

Well, this is why we have compiled these tips. Below we will help you with your minimum salary to buy a car in South Africa, so continue reading.

Understanding credit scores

Before anything else, it’s important for you to understand how credit works. To get vehicle finance, you need to have a good credit score. A credit score shows your likelihood of sticking to your loan agreement. Your credit score can be in the following brackets;

– 800 and more: Exceptional score with impeccable finance deals

– 740 – 799: Excellent, also has good finance deals

– 670 – 739: Very Good

– 580 – 669: Good

– 579 and below: Poor

As someone who has never had any prior credit, you are more likely to have a low credit score. However, that does not mean you cannot afford to get a vehicle on your average monthly salary in South Africa. Lenders have a graduate car finance program which helps recent graduates qualify for vehicle finance. With this, you’ll be able to afford the cost of the car and pay an affordable monthly instalment. 

Graduate finance was introduced because lenders saw that graduates with no credit score had no finance options to purchase a vehicle. This puts people who are starting out in their career at a disadvantage, which they’ve sought to improve. Of course, for you to get pre-selected, you need to qualify, but your credit rating will no longer be a stumbling block.

How to qualify for vehicle credit

To qualify for graduate finance, you need to be under the age of 31, a recent graduate and employed or have a contract stating that you will be employed after a certain date. Your degree or higher diploma needs to be no more than three years old. 

When it comes to salary grades in South Africa, lenders understand that they are low, especially when you start out. Therefore, they are offering financial assistance to any graduate with a monthly income of R7500 or more. You also need to ensure that you have the financial means to enter a financial agreement. This simply means that you need to have the financial means to afford to pay the agreed monthly repayments on the vehicle as well as car insurance, petrol, services and maintenance.

How to ensure affordability

Since your credit score has no bearing on your chances of getting pre-selected for vehicle financing, lenders are still required to check your affordability. This means that they will take your total income and see how much you have left to spend once you have paid your bills and variable expenses. Those expenses include rent, groceries, family responsibilities, entertainment, and any other lifestyle habits you may have. To ensure you pass the affordability check, you need to budget correctly and see where you can cut back on your expenditure, leave space for your car payment, and ensure you have leeway to continue doing the things you enjoy.

Choose a car within your means

While ensuring you have the affordability is one thing, you need to choose the right vehicle. One that you can afford in the long term, and one that will give you everything you need from a vehicle. 

When you budget, do your research and see what vehicle is ideal for a first-time car owner. Pick a vehicle that is affordable, has good fuel economy and is the right size for you and fits your lifestyle. It won’t help if you choose your dream car on your starting salary. It will be even harder to get pre-selected for the vehicle as lenders will see that the vehicle is outside your price range. 

So, do your research, and find out what vehicle is suitable for you. And more importantly, take note of the prices at different places. For example, ask yourself whether you really need to purchase a brand new vehicle, or if you can opt for a second-hand one. With second-hand vehicles, you can do your research and find a great deal. Take a look at the prices online, at a car dealership and even at an auction. The price of the car will determine whether you get the financing to purchase it because lenders will assess your affordability in line with the National Credit Act (NCA). You also don’t want to be left with a hefty payment that will put you in a difficult position.

Have the correct documentation

You want your application to be streamlined and as easy as possible. Whenever you apply for a loan, lenders have documents that they require from you. This helps them verify the information you have given them and ensures that you are who you say you are. Those documents include; your proof of address, identification, your driving license and proof of employment. Having all the needed documentation at hand will ensure that the process is fast and effective, helping you secure the loan for your vehicle.

Final thoughts

Lenders are aware that a large group of people can’t acquire funding because they just left university. This makes it possible for you to purchase a vehicle and improve your credit score. The term of your loan and the amount will work towards improving your score and showing other lenders your credibility, helping you secure the future of your dreams. We hope that this guide to vehicle financing helps you get the vehicle you longed for. 

Happy shopping!