Real Life

Taxing issues

Why is a cab ride nearly double the price of flights?

Last week I flew from Wellington to Auckland and back for just $45 each way. Brilliant! But to take a taxi from Auckland Airport to a hotel address in the central city cost me $85, with a similar charge when I returned to the airport. It seems ridiculous it costs me more for a taxi fare to town than it did to fly across the North Island. As air fares become increasingly competitive, why do cab costs remain the same?

You make a great point, though it is wrong to suggest all fares remain the same. Sure, they are expensive with corporate or more established companies which don’t seem to have changed much, but a hotel receptionist recently put me on to a firm, Discount Taxis, that picks you up from any central Auckland address and delivers you to the airport for $35. The other way, from the airport to central Auckland, costs just $5 more to cover the amount they have to pay the airport to pick up a passenger. Check online for other places that offer the same deal – I believe there are some. Many hotels won’t tell you about these because they take a cut when they call you one of the more expensive companies. The deal I got involved a modern, clean cab, and an extremely courteous driver. I shudder to think how much my former employer may have saved on fares over the 10 years or so I commuted to Auckland once a week. There are also airport shuttles and buses that are even cheaper, but I reckon $35 direct route

is pretty hard to beat.

PAYBACK TIME

Someone told me recently if you make your mortgage repayments every fortnight instead of monthly, you save a huge amount of money. Is this true and, if it is, why don’t the banks advise customers to do this? Could it be that saving you money doesn’t work in the bank’s favour?

Yes, this is correct – but you’re wrong about the banks. They do advise customers to do this. By making mortgage repayments fortnightly rather than monthly, you can settle the debt faster and pay less interest overall. I have just picked up the following example off ANZ’s website:

If you have a mortgage of $350,000, making fortnightly payments of $1,100 rather than monthly payments of $2,200, you’ll pay an extra $2,200 each year. But this means you would take four years off the term of your home loan. For the extra payments of around $8,800 overall, you would save $57,000. Obviously the advantage increases the bigger your mortgage.

There’s nothing magical about all this – in effect, all you’re doing is paying your loan back quicker. Of course, not everyone is in a position to do it. But if you are, you

should consider discussing it with your bank manager or loan specialist as soon as possible.

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