Kinto maths explained

I love maths. It rules the world.

I often wonder what BMW would do if they denied sales to the VIP Protection unit. And Mercedes did the same? And Audi. And Range Rover? And Toyota 300? Interesting. I can sympathise that the political fall out would be swift and damning for all of them but man, it would be a hoot to watch.

But this is about Good News and Good Numbers. Read on and see if you agree with me about it.

Alan and I did a quick chat on YouTube (MotorMatters) about the new Kinto offering from Toyota. Kinto is, when stripped down to it, a full maintenance lease almost rental fully insured offering that Toyota have had around since October last year, but which is now coming to the fore prominently.

It takes a Toyota to pull this off because if you take a look at it you kinda need to be pretty big. The idea is that you pay a fixed monthly cost and Toyota gives you a car to use (the PC term is vehicular mobility access). The monthly cost includes everything except tyres and petrol although there is an option to even include the tyres (I am having bad thoughts).

Everything includes maintenance of everything on the car, and what Toyota won't call insurance (for complicated legal reasons) but what everyone else knows as insurance.

So let's run some numbers, which is the politically correct way of saying 'let's do some math'!

We'll use the promo Vitz. The 1.0 MT Vitz. You can have this on Kinto at R2999 per month. List price for a new one is R189,900.

At a 12% interest rate (which is GOOD at the moment) with no deposit and no trade in and buying the car over 5 years (i.e. you own it outright) you will need to pony up R4,224.00 every month.

Over 5 years this is R253,440.

If you Kinto'd the car you'd have paid R180,000. Which means you have saved yourself R73,440. Could you buy a second hand Vitz for this money in 5 years time? I think a Vitz might be worth R100k in five years time. So you'd be at a loss of R25,560.

But what about insurance? Oops. As a 30 year old male in Jhb to insure my Vitz will run me around R900 a month. R54,000 over the term. Meaning now I am R28,440 better off. And if anything had gone wrong with the car in that time I'd be better off by that amount too.

At first glance then it would appear that Kinto makes a lot of sense. At second glance it still makes sense.

Where lies the risk? Perhaps in that the second hand price of the car is more than R100k (a possibility if inflation runs amok). But then your Kinto payment should keep track and the nett result should be the same. Even if it were slightly off, for the simple fact that it saves you on your cash flow, that you can exit more easily with less pain, and that you can trade up, down or sideways and that there are other Kinto offerings coming into the Kinto mix - well...

As a new first time car buyer I'd be all over it like a rash. It really does look a little like a bit of a no-brainer. And the GR86... heavens. The temptation is strong with this one.