How buying a car can be like dating
Your old ‘skidonk’ has let you down, again. This time, she’s decided to dump you right in the middle of Grayston Drive, Sandton traffic (in the morning, nogal!). A merciless barrage of car horns rattle your eardrums. Choice words ricochet off your stationary car as frustration gets the better of everyone in their rush to work. You’ve known for a while that it’s time to move on from your first love, but now it’s time. Time to buy a new car.
But where to start? Here are 7 essential things to know when buying a car:
- Commit or stay away
Those experienced in the game of buying cars say you should avoid car debt at all costs. They advise that if you’re not ready to commit (pay cash), rather wait until you can. Alternatively, wait until you’ve saved for a significant deposit for the car. This means you can pay off the car sooner and/or pay minimal instalments.
There are various investment and solutions available to you if you’re looking to pay cash for a new car, or at least for a sizeable deposit:
- An African Bank Tax-Free Investment offers market-leading interest rates. In line with South African laws, you can invest up to R33000 per year, tax free. With a minimum deposit of R100, you can deposit additional funds in your account at any time.
- Make monthly deposits into an African Bank Notice Deposit account, which gives you market leading interest rates and allows access to your funds at seven, 32 or 90 days’ notice.
Depending on your financial situation, it may be wise to look at the costs, as well as pros and cons of leasing vs buying the car for a short time. There’s no intention of owning it at the end of the lease period (which is usually shorter than car instalment period). The biggest advantage of leasing is that you pay less than what you would on an instalment, which effectively gives you room to save for a significant down payment (or full payment) for your ideal car.
The leasing option is ideal for people who like to drive a new car every three to five years.
The biggest downside of ‘committing’ to a car is that, because a car’s nature is to depreciate in value (unless it’s a classic), you normally lose out when you decide you want a ‘divorce’ at a later stage.
- Get a car in your league
Those with the most attractive cars usually look quite satisfied to the outside world. Look a little deeper and you’ll see the stress of high monthly instalments and the associated insurance is not worth it! Before getting that hot new car, consider insurance costs, petrol costs and the costs of maintaining or servicing the car. Those add up at the end of the month.
- Don’t date the first car you see
Your friends weren’t really being mean when you introduced that new boyfriend as ‘the one’ and they basically said ‘is that all you’ve got’. Like with dating, you really should look around a bit before settling on ‘the one’. Go online and swipe left or right for a while or get different quotes from at least two or three dealerships. You might even get a discount if you play the dealerships against each other – like “so and so is offering me free smash and grab, what can you do for me?”
The cool thing with dating (that most people forget) is that there really is no harm in dating multiple suitors. Take your time have fun with it!
- Do some due diligence
These days, people Facebook/ IG/ Twitter stalk or Google their potential suitors. What’s really awesome about shopping for a car is that you could go to a car manufacturer (using a VIN number) and check for the car’s accident and service history – if you’re buying second-hand, that is. You can even Google to check if the manufacturer has had any recalls, etc.
The advantage of buying a car brand new, though many advise against it (due to depreciation), is that your car doesn’t come with a history.
- The true test
Some people have so much fun test-driving cars that they test drive, even after committing to ‘the one’! While on the lookout, it’s absolutely necessary to test-drive the car(s). There’s a certain art to test-driving a car and there are certain things to look out for while test-driving, such as testing in different driving conditions (i.e. open road).
Experts advise that you take an experienced car buyer/motorist with you so that they can help you check for some ‘blind spots’.
- Don’t be led to temptation
It’s often tempting to buy into the extras that salespeople might want to throw in – like a sunroof, smash-and-grab, credit shortfall insurance, paint protection, etc. When buying the car at a dealership, these seemingly great extras may end up being more expensive than if you’d just waited and shopped around for better deals.
- If only all relationships would come with insurance…
Unfortunately, they don’t. However, cars should definitely have insurance. According to the Automobile Association of South Africa, 65-70% of the 11.4 million registered vehicles (in 2018) are not insured. With the chaos on South African roads, it is pretty risky to not have your car (and 3rd parties’) covered.
Vehicle insurance can be quite costly though, so you might want to consider putting some savings aside. This means that you could negotiate lower premiums and higher excess. Much like shopping around for a car, spend time comparing and playing off insurers against each other for the best deal.
Unless you’re saving up enough, don’t forget to insure your wheels and tyres too. Many people find out the hard way just how expensive these can be.