How can you leverage residual payments to work for you and not against you?
Let me start by saying this is not financial advice , but rather financial education—specifically around why balloon (residual) payment plans exist , and how they can be used properly to make your money work for you instead of against you. After 10 years in both the new and used car market, I’ve picked up a fair amount of insight that I think is worth sharing. Dealers today rarely advertise the actual price of a vehicle anymore. Instead, they push the pretty monthly instalment , because it looks far more attractive than the real number ever could. “R8 999 per month with a 40% residual” hidden in small print versus “R1 000 000 purchase price” sounds amazing and affordable… right? Let’s start by understanding what a residual actually is . If a vehicle has a retail price of R1 000 000 and you finance it with a 40% balloon , you’re effectively financing 60% of the value and agreeing to settle the remaining 40% as a lump sum at the end of the contract. In this example, that means R400 0...
