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Top five mistakes to avoid when buying a car

Research your options and don’t make haste decisions.

Picture your favourite car. Is it the car’s sleek lines, the speed it goes from 0 to 100, or the spaciousness of its interior that makes you love it and daydream about owning it? Now just imagine that the time has come to sign on the dotted line and for you to drive off the showroom floor.

Chances are the thought makes you smile – because buying a car is an exciting milestone that most of us look forward to right from when we first get our driver’s license (both to celebrate our newfound freedom and as a reward for overcoming the hellishness of the driver’s test).

Being able to finally buy or upgrade our own set of wheels can, however, also be a stressful experience with the potential to make what can be expensive mistakes. We have seen what should be a time of celebration become a nightmare case of ‘buyer’s remorse’ because of a simple oversight. To help you avoid making the same mistakes, we have covered five of the most common mistakes that you can keep an eye out for:  

1. Not doing your research beforehand

You should ideally have some idea of the type of car you want to buy (and can afford), do your research online before going to your nearest dealer. Compare different options to see where you will get the best price, and find out about the different pricing and financing terms available to you. We live in an age where we can access a flood of information at our fingertips, so take advantage of this to stay informed.  

2. Focusing on price at the expense of the financing terms

While price is obviously a major factor you have to consider, remember that the price tag you see isn’t what you will actually pay in the long term – with interest and other costs like maintenance and service plans. Discuss all of these factors with the dealer so that you know exactly what your monthly obligation will be, and ensure that you will be able to meet this commitment.

3. Purchasing used vehicles

Whilst you can usually get a better deal on a used vehicle, it is important that you do your research thoroughly beforehand and visit a reputable dealer. Also be sure to check if the car is still on a motor plan, and if not find out about what options are available to you and what they will cost over and above your monthly repayment. Ask what a major and minor service typically costs on your model of choice, and calculate whether it makes more sense for you to purchase a formal plan or put money aside to cover each service – but make sure that you actually put money aside each month if you choose to go that route. 

4. Failing to consider all your optionsleasing versus buying

More South Africans are looking at leasing rather than buying because it allows them to enter a shorter contract usually at a lower rate and change their car when the contract ends. However, while that may sound appealing, remember that you will never actually own the car and don’t have anything to show for it at the end of the contract. There are also often limitations on usage of the car, including a maximum number of kilometres that you will be penalised for going over. There are, of course, pros and cons to both options, but it is important for you to weigh up what will work best for your own needs.    

5. Rushing into a decision

Think of any big decision you’ve made – chances are you didn’t rush into it, so the same should apply when buying a car. Don’t go into the dealership feeling like you have to walk out the proud owner of a car. This can cause panic, which puts you at a disadvantage as you may be inclined to take a deal even if it isn’t in your best interest. It may include features that you don’t actually need that drive up the price over what you budgeted for or not be the exact model you are looking for.

Ultimately, choosing to buy a car should be a happy milestone, not a miserable experience that you look back on and regret. The best way to avoid this is to borrow smartly and find options to help you cope, which research and a conversation with your financial advisor can help with to get you behind the wheel and on the road. 

Charl Potgieter is the head  of Absa Vehicle and Asset Finance, Personal Markets at Absa

COMMENTS   9

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This article is vague at best!! She says buy a car you can afford BUT they will give you a balloon on a car you can’t afford and now can. But in 6 years when that balloon pops you will have a repossession issue if you can’t come up with the balloon payment (and most cannot come up with the cash)and the car will mostly be worth less than the balloon. How do you work that?
Leasing versus buying– Buying a new car every so many years costs you over a million Rand in 20 years.That is your interest you pay compounded over 20 years.

That would be because someone who works in FINANCING vehicles is giving advice on VEHICLES.

Quite nice article actually! Charl (that’s he not she!) is for sure an experienced guy in auto financing. So it could prove helpful to hear what he has to say on this matter. I‘m not a professional but I would bet a lot of car buyers would be better on if followed those (simple?) 5 points! Doing one‘s homework was essential in the school and remains so for life!

What a terrible article. How can you possibly say mistake number 3 is purchasing used vehicles?
That’s the one thing you SHOULD do.
Mistake number one is buying a brand car and incurring the massive devaluation, mistake number two is financing said car.

Now I for one would disagree with you. I have NEVER had a used vehicle. My first car was brand new – I saved for it and bought it cash. Then again I have bought 4 vehicles in 46 years.

My : “Top five mistakes to avoid when buying a car”

1: Buying cars with a balloon payment so that you can “afford” it.
2: Letting the dealership rip you off with “On the road fees”, go in with a clear head and negotiate that down, if they really want to sell the car they will come down with it.
3: Extended motor warranties, these have BIG T’c and C’s cost a small fortune and I only know of one person that has actually ever used his.
4: Bank interest rates, compare rates from everywhere and don’t be shay to try and demand a better rate.
5: Don’t buy a car that has unnecessarily high running costs, especially if its not needed, I am of course talking about all the guys that buy Landcrusers that live in town and use it to dropoff the kids at school and almost never see a dirt road.

Mistake No.6

Trying to determine HOW MUCH you can afford, versus HOW LITTLE you need to spend to get what you NEED. At that point it doesn’t matter whether or not your 2nd hand purchase is out of the Motor Plan as long as the car is low mileage and has been properly maintained. The difference in price could more than make up for the costs of maintenance.

And the most prevalent mistake is not in this list – “Buying a car using debt”. But I guess that makes sense given that the author is he head of vehicle finance at ABSA… Buy cash. Live within your means.

Mistake no? I have lost count: Never buy a car to impress people who don’t know you with money you don’t have have. Simple as that.

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