Taking the big step to buying a car in South Africa? Here's what to do!
1. Work out your new (or used) car budget
Being realistic (and even a little paranoid) about your monthly expenses is of the utmost importance. The total cost of car ownership includes more than the purchase price; you have to think of insurance, fuel, maintenance costs and in some cases, even toll fees. Then there's expensive parking, fixing parking-lot scrapes and dings, and so on.
Most people cannot afford to pay cash for a car, so 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.
Use our Car Finance Calculator to budget for your new car
2. Do your research to find the perfect car for you
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 manufacturers' 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. Search AutoTrader for the latest news and reviews of the latest and older models, and check our listings carefully. It's always preferable to look for a car with a full-service history. And don't forget to make sure the car fits in with your lifestyle.
Decide if you should buy new or used
It's been said that a car depreciates the moment you drive it from the showroom floor. Nope, a new car is not an asset, apart from the street cred that it may bestow upon its new owner, so 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 grow weary of it three years in, you will probably have to take quite a hit when you want to 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.
Should you buy from a 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? Reputable dealerships usually have the skinny on the car in question's previous life but who knows if they're being completely honest? Fortunately, you can use AutoTrader's handy vehicle check tool here to make sure you don't buy a lemon.
You can always take a private seller or a dealer's car to be properly checked out by the pros. A German company called DEKRA, an AA affiliate, has taken over these technical inspections from the AA. These examinations will help you identify vehicle flaws so that you make an informed decision when buying a used car.
Buying privately - the pros and cons
6. Paying for your new car: Cash, finance, or lease agreement?
Car finance 101: key terms explained
1. Cash
Is cash king, or is financing the way to go? Read this article below to find out.
Related: Buying a car with cash vs financing
Can you get a better deal if you pay with cash? Click on the link below!
Can I get a better deal on a used car if I pay with cash?
2. 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 it for so much longer.)
Related: The pros and cons of buying a car on finance
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 to take full ownership of the car. Read more about the potential pitfalls when it comes to balloon payments below.
The pros and cons of a balloon payment
3. 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 upfront, but on every monthly instalment. But there are downsides to this option as well, especially if you rack up high kilometres or damage the car. Read more on this below:
The pros and cons of leasing a car
5. Take a test drive (or take a few)
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.
What is the best way to test drive a car?
5. Buy the car
Happy with how it drives? Now you can go ahead and tell the sales executive or private seller you're happy to go ahead with the purchase, but there's always room to negotiate. Read this article below for tips:
How do I negotiate a new car price?
Then there's also the issue of insurance. Even if you buy a used car privately, with cash, you would need third-party insurance at the very least. More on this here:
Insurance requirements for buying a used car in SA
To ensure you have all the right documents on hand, click on the link below.
What paperwork do you need when you want to buy a car?
6. Register your vehicle
Once you've successfully secured a finance agreement for your new car, or you've bought a car privately, it's time to register the car in your name. The article below will tell you everything you need to know to get this done and dusted!
Do you have to register and license a car as soon as you buy it?
