The Virgin Car Buyer's Guide to Acquiring a Ride - Used Car Buying Guide

You thought marriage was a big step? Try buying a car.

You're finally done hitch-hiking, taking the bus, bumming a lift, or being part of a car-pool. Yes, it's time to declare your independence or perhaps your newfound status as an up and coming professional.  So once you're ready to put pen to paper, remember that buying a car is a huge commitment as you will be signing your life (or your disposable income) away to a large extent. But it need not be as daunting as slaying a dragon for 72 months on end. Autotrader gives some fun tips on how to go about it.

New or used?

It's been said that a car depreciates the moment you drive it from the show room floor. Nope, a new car is not an asset, apart from the street cred that it may bestow upon its new owner. So before you sign on the dotted line, make sure you know what you're getting yourself into, and be aware that there will be losses later. Resale value is a huge point of consideration. Perhaps you have your mind set on a cost-effective Chinese or Indian brand, but if you've grown weary of it three years in, you will probably have to take quite a hit when you want trade it in for something different. And after five years any vehicle is only worth a fraction of the price you paid for it. There is sensibility in sticking to the Polo Vivos and Toyota Fortuners of this world. A good tip would be to buy a one-year old top seller of the previous year, like a VW Polo Vivo. There's usually big savings to be made on the lower specced models. And if you really want a bargain, a five-year old car with low mileage can be a great deal. Just make sure you buy a warranty/service plan to cover maintenance costs. Short term warranties and service plans are available if you don't plan on driving the car for all eternity.

Budget much?

You may discover that you weren't your loaded uncle's favourite nephew when that holiday house in Camps Bay goes to your brother.  Being realistic (and even a little paranoid) about your monthly expenses is of the utmost importance. The total cost of ownership includes the purchase price, insurance, fuel, maintenance costs and in some cases, toll fees as well. Then there's expensive parking, fixing parking-lot scrapes and dings, and so on. The novelty of a sparkly, expensive set of wheels eventually wears off, but the agony of meeting that expensive monthly instalment won't.

Apply yourself!

With so many cars being launched each month, one can hardly keep up. The key is to do your research and to stay informed. By checking manufacturerers' websites, reading various car reviews, and wising up on specification levels and safety equipment, you will have a head start as you walk into any dealership - especially if you know what the opposition offers.

Taking it for a spin

Once you've narrowed it down, it's time to test drive a few options. Make sure you don't just drive it down the road and back. You should at least get the opportunity to take it out on the open road and possibly a few not-so-perfect road-surfaces to see how it performs.

Private Seller or a Dealership?

When it comes to a private seller, what guarantees are there that the vehicle's in decent shape, or if there were any accidents, for example? Also, as much one would  like to seem knowledgeable, most first-time car-buyers have no idea what's going on beneath that bonnet. Reputable dealerships usually have the skinny on the car in question's previous life. However, you can take a private seller's car to be properly checked out by the pros. If you're an AA member, you qualify for a 15 percent discount on roadworthy tests, multi-point checks or a more thorough technical inspection, which takes two to three hours. A German company called DEKRA, an AA affiliate, has taken over these inspections from the AA. These examinations will help you identify vehicle flaws, and make an informed decision when purchasing a used car. Or perhaps you're selling your own car privately? Once DEKRA has inspected your trusty old steed and given it a clean bill of health, it should be that much easier to make the sale. Go to www.aa.co.za or www.dekraauto.co.za to find a DEKRA centre - there are plenty.

Dollar signs?

Once you're seated in the dealer's office and it's time to talk money, you don't have to feel like an abattoir lamb. No-one can afford to pay cash for a car, but putting aside the equivalent monthly repayment for your car for several months and using this as a deposit, is a wise thing to do. And the bigger the deposit, the stronger your finance application will be.  So what options are there?

1. An instalment sale agreement. The car is in your name, but in actual fact it belongs to the bank until you pay the final instalment. Most people opt for a lengthy 72 month contract period, which means the car isn't more affordable, it's only the monthly repayments that are less. (And you keep paying for so much longer.) Opting for a sale agreement with a balloon payment is the road that many people take to lessen the monthly load, but people are sometimes shocked when they realize how much they have to cough up at the end of the instalment term. If you plan on regularly trading in your vehicle for something better, a balloon payment is the way to go. But if you're planning to drive your car until its wheels fall off, the balloon payment option is not necessary.
2. A lease/rental agreement. You get to drive the car to your heart's content, until the end of the contract. Then you have the option of retaining ownership, or giving the car back and leasing a new car. Since you're not buying the whole car, so to speak, but only the part of its value that you utilised during this period, your monthly repayment will be somewhat lower. VAT isn't paid up front, but on every monthly instalment. But there are down sides to this option as well, especially if you rack up high kilometres or damage the car. For more info, go to http://southafrica.smetoolkit.org/sa/en/content/en/7539/Buying-a-Car-Buy-or-Lease-
Another tip from a dealership for the first time car buyer, would be to open as many accounts as possible so you can get a favourable credit rating. Living under the radar and off the grid is great, unless you want to be taken seriously by the banks.

Happy hunting!

Photo Credit: Ser Borakovskyy/shutterstock.com