For seasoned buyers the experience comes in very handy as they navigate their way around familiar territory for the most part, although at times there may be a handful of new items they are unfamiliar with. The rest do mainly fall on the daunting side of things. We have a few tips to assist in making the process a little bit easier for any buyer…….
Choosing your car
This may sound easier said than when actually doing, especially once a car has been chosen from a website such as Carfind.co.za or a physical dealership, or a friend / relative. The main question to ask yourself is “What is the purpose of this vehicle?”
In other words is it for leisure, business, carrying people or for driving long distances?
Make the process of choosing a car so much easier and faster by browsing on the Carfind.co.za website to find the right car that fits your needs; style and pocket. Find it. Fast.
Running costs
One of the fatal mistakes people make is to save or set aside a specific budget matching the exact price of the vehicle, and never take into account extra costs associated with the post-sale.
For example, if your budget is R400 000, do not spend your last R400 000 on buying the car. There are extras to look out for, such as insurance, fuel, tyre maintenance, unexpected expenses like insurance excess in the event of a collision, etc.
Bundle all these and include them in the monthly costs of maintaining the vehicle. In 2020, Wesbank calculated that the monthly instalment and fuel made up 79% of monthly running costs of a vehicle.
Financing
Financing a vehicle is a simple, yet complex process that involves several parties, including the buyer, seller, financing house (typically a bank) and insurance companies.
It can even include more parties if the vehicle is being purchased as a gift or donation. While it is easy to fall into the false sense of ownership, one must always keep in mind that the vehicle technically remains in the ownership of the financing house until it is completely paid off. This will help when considering the amount of finance applied for, and affordability, as well as the period of financing when thinking about “selling” mid-period.
You may finance a vehicle using a number of instruments, such as full cash, instalment, instalment with deposit, instalment without deposit but with balloon payment, and instalment with deposit and balloon payment. In general we accept the balloon payment as a form of assistance to consumers, but we are not particularly fond of it, because very few consumers do budget for it during the instalment period. Those who do not, often find themselves in a pickle at the end when they have to pay this often large amount.
The best advice we can give is:
• Save up for longer in order to offer a larger than required deposit.
• Try to avoid a balloon payment option; especially on pre-owned vehicles
• Ask for a discount. Most dealerships are willing to do this.
• Do not fall into the trap of a longer financing period, as this will inflate your interest portion quite significantly.
What is interesting is that it appears that the younger generation is not that much interested in owning a car; as they simply want to use it. In other words, they generally don’t see a reason to buy a car, which then brings up interesting questions about how future finance should be structured for those who want to only use and discard/ pass on/ share/ not use and subsequently own a car.
Service Plans
Vehicles that are well-taken care of fare much better over time, than those that are not.
When purchasing a car, be on the lookout for the manufacturer’s service plans. Depending on the brand, these can be fixed or extendable. They are also planned for different periods of time or mileage covered by the car.
A service plan can be included in the purchase price, or be optional, so take a close look at the offer at hand. For a pre-owned vehicle, there must be an official service history book or log that has been stamped by a reputable service centre or centres over the life of that vehicle. With pre-owned cars, there are also options to extend the service plan for a longer period of time, again depending on the brand and vehicle.
However, this does not mean that a car that no longer qualifies for a manufacturer’s service plan, should not be serviced. Far from it. There are companies that offer out-of-service-plan service plans to older vehicles, at a cost. It is worth investigating and investing in these for the longevity of the vehicle.
Warranties
A warranty is a pretty simple item.
It is basically an undertaking by the vehicle manufacturer to repair defects – within a specified amount of time – that are as a result of manufacturing errors. They do not cover normal wear and tear, such as the use of tyres while driving.
However, should something like a turbocharger blow up within the first month of purchasing a vehicle, or the infotainment screen freeze and stop working, the warranty should have that covered. Those should be repaired free of charge. Unless gross negligence is found. An extreme example of this would be if it was found that you spilled a fizzy drink onto the touch screen and therefore caused it to malfunction.
Insurance
In this day and age - insurance is a must!
In fact, buying a new vehicle require that insurance be part of the package. This should be mandatory to pre-owned vehicles as well. It is a vast, and oft-misunderstood industry and we unfortunately are not necessarily covering all of it here.
What is important is the following:
• Shop around and find the best insurance deal for you
• Your car insurance does not cover everything
• Read the fine print before signing anything
Insurance companies typically do not want to pay you out. At all. They would rather not. Therefore they will investigate a lot of the claims made. It is prudent to be honest and truthful when filling out insurance claim forms, especially when driving a modern car with an on-board computer that can either confirm or dispute your “story”. For example, these cars can record their own speed at the moment of impact during a collision. If you write that you were driving at 60km/h, whereas you were actually driving at 100km/h, the car will catch you out, so will the insurance investigator, and payment will not be made.
The same applies to things like dents and scratches, which happen on a daily basis. It costs money to fix a dent or a scratch, and insurance wants to know that it was not caused negligently, under the influence of alcohol, or any other circumstance caused by the driver. In other words, it must be an accident for it to be fixed. Otherwise one would have to repair out of pocket. Of course with the Right to Repair that came into effect last year, consumers have a much wider choice of service providers to call upon for this. There are companies that specialise in providing cover for specific incidents, including minor dents and scratches.
Just remember to use a reputable, registered repairer at all times in order to keep the car’s integrity intact. It is not recommended to repair body dents and scratches yourself, as this may invalidate the paint warranty.
