If you are thinking of buying a new carm we have some tips that will make your decision a lot easier.
Buying a car can be daunting and even scary, whether it’s your first vehicle or you’ve purchased a few before. Because it is a big purchase, you don’t want to mess it up. To avoid making a mistake, think about what you’d need and how it would suit your lifestyle. As much as you may fancy an SUV, if you’ve mainly using a car to drive around the suburbs, an expensive one – such as the SUV – might be a waste of money.
Determine what your budget is
After making a decision on what you’d like and need, calculate how much money you can realistically spend on it. You can do this by using an online calculator such as the one on cars.co.za. Don’t forget to add in insurance costs and the price of petrol. To calculate how much fuel your new car uses per kilometre, you can go to aa.co.za. This may sound tedious, but it will save you a lot of time and money in the long run. It might also show you whether or not you can afford the new car you’d like, a demo model or a second-hand vehicle.
Start browsing smarter
Now that you know what kind of cars are within budget and suit your lifestyle, you can start browsing the web. Even if you find that you can afford a brand new car, don’t jump into buying one just yet – you might come across a great demo model or second-hand option that is in excellent condition, reliable and will save you money. Consider a model that has low mileage (under 100 000 km). A really old, cheap second-hand car may seem great especially if you’re just using your car to drive from A to B, but you could end up paying so much extra on services and repairs that you might as well have purchased a better model to start with.
Dealership or private seller?
Once you know roughly what you’re looking for, you need to decide if you want to get your car from a dealership or privately. You should check out a dealership in any case because they probably have more options, and could advise you on a car within your budget that you might not have come across. Dealerships are also great in terms of giving you more peace of mind because they are reputable businesses. Banks are more likely to give you a loan if you bought a car from a dealership rather than from someone privately. To see which dealerships are close to you, it’s as simple as an internet search! And before settling on a dealership, it may be worth your while to do a background check on the dealership you had in mind. You could do so by asking those you trust on their experiences or search for reviews online. If the results are not to your liking or the private sale makes you feel uneasy, listen to what your gut tells you and stay clear.
Private seller checklist
If you don’t want to buy through a dealership, but rather privately so that you can negotiate a better price, don’t forget to make sure that the car is still under finance, has its service history records, a roadworthy certificate and a VIN and engine number (that you can run at a police station to make sure the car is not stolen). However, there’s always a risk that the car’s documentation could be forged, so don’t trust it fully. Another way you can see if a car is stolen or has been accident-damaged is by taking photos of the licence disk and putting it on an online service such as vehicle check.co.za. This will also assist to check if the owner still owes money on the car and if so, the outstanding balance should be paid directly to the bank.
Now on to payment. You will need to decide on whether you would want to buy your car in cash or opt for monthly instalments with a deposit and/or do a balloon payment. If you already have a car, make sure that it is fully paid up, so that you can sell it to a dealer for a good price and use that extra money to help buy the new one.
Having more money to buy the car also means you will borrow less from the bank (if you need to) and essentially pay the new car off sooner. Remember that cars depreciate in value so you will never get as much or more than what you originally paid for it. If you don’t already have a vehicle, it’s not an issue. You will, however, still need to decide on a payment method that you would be comfortable with.
Buying in cash is a great option because you will save money on interest that you would be paying if you were to choose the monthly instalments or balloon payment options. However, buying in cash is not always an option for many due to various financial reasons. If this is you, you might end up spending more money in the long run, but because you’re paying through monthly instalments, you probably won’t feel as big of a toll than if you were to pay it upfront.
When it comes to instalments and balloon payments, monthly instalments are a better option due to the fact that balloon payments can trick you into getting a car that you essentially can’t afford. In short, balloon payments brings the value of your monthly instalments down. At the end of the contract, however, you will need to pay the remaining money back and, unless you have that money in your account, you’ll have to trade in your car to pay it off, and essentially rack up more debt. However, if you are very good with your money, a balloon payment option can help you get that car you really want and wouldn’t have originally been able to afford.