Over the course of this year, the new vehicle market in South Africa has been under some strain as consumers opt for better value and greater affordability in the second-hand market. This can be attributed to a myriad of economic factors including: raised cost of living, a weakening rand and higher interest rates. As consumers’ budgets shrink, investigating purchasing used cars to stretch every rand becomes more important.
When making the new versus used decision, each of us must examine our unique set of financial and life requirements. A little introspection is good for the soul and the wallet. For most people, we think it makes more sense to buy used, but there are some exceptions.
In order to make a smarter choice for yourself and your future, you must consider a few factors:
- In order to keep from making a regrettable purchasing decision, you have to consider various factors including the selling price and additional costs. Determine your budget and then see what’s available in the market.
- Ask yourself: Is the car worth the price? There are many extra costs to keep in mind, like the current interest rate and how it affects the selling price of the car. Insurance costs also increase with older cars.
- Also consider whether you have a down payment or can trade-in with equity.
- Look at the affordability of a maintenance plan, as well as the cost of possible repairs and parts. New cars also typically come with a full manufacturer’s warranty, which will give you an easy way to have many faults repaired for free.
- Look at the condition of the car, which depends on how well the owner has taken care of it. A good seller will always have a service book with a full service history available.
- Take the car out for a test drive and when doing so, check the vehicle’s mileage on the clock. An older car with a lower mileage is likely to be in a better condition than a newer car that has clocked up a high mileage.
- Look over the body of the car to check for any dents and scratches, as well as for paint ripples or over-sprays, which may be covering up signs of an accident.
- When you are ready to buy a used car, make sure you choose a reputable used-car dealer who will provide you with assurance that the cars have undergone inspection and checks so that you know they are in good condition.
- While buying from a private seller may bag you a better deal, you will have to sort out the paperwork yourself. There is also a greater risk that you might be misled in some way over the true condition of a used vehicle.
- Some of the additional drawbacks of buying a used car are that you may be more likely to develop problems from wear and tear as it costs more to maintain a used car.
- Moreover, you cannot choose the specifications of a used car like you can with a new car.
Faisal Mkhize, Managing Executive of Absa Vehicle and Asset Finance.