MONEY CLINIC | I have R1.3m in savings, and no debt. Should I buy an SUV or a third property?

play article
Subscribers can listen to this article
katleho Seisa/Getty

A Fin24 reader considers how she should spend her R1.3m in savings. Looking to an expert for guidance, she writes: 

I am married in community of property and have two houses that are fully paid up. I have R1.3 million savings and two wishes: 1) to buy myself a R920 000 SUV and 2) to buy a third property of R1.5 million as I wish to live in a different province. 

I am debt free and have been torn on what to do.

I am inclined to buy the car cash, as it has high interest rates, and use the rest as a deposit for the property.

Your guidance on this matter is appreciated.

Hardi Swarts, director of Autus Private Clients responds: 

First of all, well done on having two fully paid up properties; it seems like you are well on your way towards financial freedom.

Based on the limited information; I agree that if you want to buy the SUV then it may be best to purchase it using cash because your interest rate on your car will most probably be higher than the rate you would pay on an additional property.  

However, I do think you should consider the following before purchasing the SUV: 

A vehicle is a lifestyle asset, and the costs include:

  • Maintenance and insurance
  • Depreciation 

Whereas a property is an investment asset and the gains include: 

  • Investment growth
  • Rental income

You could consider first buying the property and saving the rental income you receive until you have enough savings to buy the vehicle using cash or you could consider purchasing a second-hand car at a much lower cost. 

Unless you really need the SUV I would not recommend taking on debt especially considering that you are currently debt free. 

Questions may be edited for brevity and clarity.

  • Have a money problem that needs solving? Fin24 can help! Send your question to

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

Get the biggest business stories emailed to you every weekday.

Go to the Fin24 front page.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
What potential restrictions on unvaccinated South Africans may make the biggest difference to public health, the economy?
Please select an option Oops! Something went wrong, please try again later.
Limited access to restaurants and bars
11% - 145 votes
Limited access to shopping centres
15% - 192 votes
Limited access to live events, including sport matches and festivals
27% - 353 votes
Workplace vaccine mandates
48% - 626 votes