How to buy a new car South Africa

That new car smell

There are few things that compare to the excitement of purchasing a new car. Before you go running to get that shiny new luxury SUV, there are a few things that you may want to consider. You may want to keep the following in mind before signing on the dotted line so that you can enjoy your new car for years to come. You will need to find the crossover point of the vehicle that you want and what you can afford as well as working with dealerships and finance houses.

Related: 10 tips for getting the best new car deal

Below we walk you through deciding which car to buy, the paperwork, and the process of the transaction.

1. The Car

The reality here is that we all like the latest shiny new thing, however, you need to consider a number of factors when deciding on what car to buy. Take into consideration what you need the car for, your family, your lifestyle, and your work. There is no point in buying a fancy hot hatch if you have a large family or you live in a rural area and it also doesn't make sense to buy a giant luxury SUV if you live in the city and are single. Carefully research and find the car that is right for you

2. Affordability

This is the single most important factor when buying a car, make sure you can afford the monthly payments and the everyday running costs. You will have to do an affordability assessment when applying for finance and this tells you what you can comfortably afford to pay. You will also need to take into consideration the maintenance such as tyres, alignment, brakes, etc. when finding out what your monthly installment will be.

3. The Dealership

Now that you know which car you want and can afford, you can begin searching for it. Once you find a dealership that has the make and model in stock you can contact them and go for a viewing and test drive. Do your homework on the dealership to make sure that they are on the up and up and then pay attention to the salesperson. Don't be pressured to buy or fall for added extras or time constraints. Do negotiate on the price and extras and which services the dealership offers.

4. Paperwork

Once you have decided on a purchase price, the dealership can assist you in applying for finance through their in-house finance department. They will need some documentation from you in order to process the application. Have certified copies of your ID, Drivers license, Proof of employment and earnings (payslip), and proof of address on hand to expedite the process. You can get your own finance through your bank or chosen finance house but you should always go with the institution that gives you the best terms ie: interest rate and installments.

5. Insurance and collection

Any vehicle that is subject to a finance agreement has to be insured. This is because the vehicle technically belongs to the finance house until it is paid for in full and they don't want their asset being lost to fire, theft, or accident. You will be required to provide proof of insurance before the dealership will release the vehicle to you and you should be aware of a few extra costs that dealerships may add to your invoice such as "on the road" fees (licensing, number plates, cleaning, and prep)

There is another option and that involves buying the car outright with cash. In this scenario, all of the above don't apply and the only things you need to concern yourself with are negotiating a price and the dealership fees. This is however very unlikely and only applies to the 1% of the 1%.