If you’re looking to upgrade your car, it’s possible that an older used car that’s more affordable is the way to go. And you wouldn’t be alone in thinking so. AutoTrader’s Mid-Year Car Industry Report shows that 263 million searches for used cars translated to R65.7 billion in sales in the first six months of 2023. That’s 17 searches per second!
If you’re in the market for a second-hand car, these five points should help prevent an affordable option turning into a high-cost headache, says Wynand van Vuuren, client experience partner at King Price Insurance.
Do the maths
Check your budget for affordability, and factor in interest rate hikes if you’re going to finance the car. If you take a balloon or residual amount in order to reduce your monthly payments, you need to be able to pay the outstanding balance when it becomes due. Another potential pitfall is that used cars often don’t have maintenance or service plans and you’ll need to either buy one or put money away every month to cover these costs when necessary.
Take it for a test drive
Always test drive a car you’re thinking of buying, advises Van Vuuren. “Listen for any strange rattles or squeaks. Make sure all the features work properly. Although the Consumer Protection Act dictates that sellers must disclose all defects, a legal dispute will take time and money to resolve.”
Make app’solutely sure
An app called FirstCheck gives you access to a car’s current market value, its full history, whether it’s been in an accident or stolen, who owns it, and whether it’s still under finance which affects whether it’s legally allowed to be sold – and more. FirstCheck also allows you to get your up-to-date TransUnion credit score, which empowers you to negotiate with the institution that’ll be financing the car for you.
Inspect Inspect Inspect
Not all second-hand cars have transparent mechanical and service histories. However, you can determine the actual condition of a car by having it inspected by an independent party, like the AA, and thus limit unexpected repair and maintenance expenses.
Insure your asset
If you finance a car, you have to have comprehensive insurance for it – this is in the fine print of your finance agreement. And even if you pay cash for a car, if you can’t afford to repair any damage that happens, or replace it if it’s stolen, you should insure it. And remember, says Van Vuuren, insurance doesn’t only cover your costs: “In the event of a valid claim for damage you cause to someone else’s car or property in an accident, the third-party liability element of your insurance will cover these costs.”
When you’re buying a used car, you need to do all your homework and get all the paperwork before you sign on the dotted line, says Van Vuuren. When that’s all done, you can head out on the highway and enjoy your new wheels.