First-time car buyers have a lot to think about, not just finding “the one” but determining where to buy and how to pay. Some people believe that the best way to learn is by doing, yet rookie car purchasing blunders can cost thousands of rands, and some can have a long-term negative impact on credit scores and financial security. In this article, we will take you through some of the mistakes to avoid when buying a car for the first time so that you can get the best out of your investment and not be ripped off.
There are a lot of car dealerships in and around South Africa, which means you may be spoiled with options in your area. Do not commit to buying at the first car dealership or private seller you run into, as you may be losing out on some great deals from others that are a tad further. Try to gauge your distance and commit to maybe an hour or an hour and a half’s drive and find car deals in those areas. Some used car dealerships, such as InspectaCar, have many branches in the same provinces and regions, so you will have lots of options to choose from. So, shop around, and while community and recommendations are helpful, do not go for the first car or dealership people tell you of; test for yourself.
As a first-time car buyer, you may feel nervous about finding out certain information or think that your questions are ‘ridiculous’. Get rid of that thought right now. It is important for you to get as much information as you possibly can before committing to anything, and any car sales dealership or seller that does not want to give you the right answers or is impatient with your curiosity should be on your blocked list. Car sales dealerships are often open to giving out as much information as possible because they understand the nerves that come with such a milestone. So, whatever you’re thinking of asking about the car, even if you think you’ve already asked it, ask it again. You need to know before committing to this large purchase.
Cars cost money. You already know that buying a car is a costly procedure itself; however, you need to remember that owning a car can also be costly if you do not manage or prepare yourself better. For example, avoid buying a luxury car as your first buy because maintaining it may send you spiralling into debt. When thinking about which car to purchase, decide on the brand you want, then look at how much maintenance for it roughly costs, from fuels to tyres, to services, and even insurance. Speaking of insurance…
As we’ve mentioned that maintaining a vehicle can get costly, you also need to remember that accidents happen. From winds and hail storms to the good ol’ bump from another vehicle. You need to stay prepared for this. While saving money for a “rainy day” may help with certain car costs in case of an emergency, car insurance can help you sort out some heavy damage that your car suffered as well as help replace it if need be. If you want to save a bit on insurance, consider adding it to your current asset insurance package.
Let’s talk about the ching ching! When buying a car, if you have the cash upfront for it, then you are most likely going to only be concerned with the day to day costs of the car. This section may or may not apply to you. However, if you are planning on getting some kind of financing for your car, a first-time car buyer’s one option is graduate finance. This type of finance is designed for young professionals who just graduated and are entering the job market with no credit history. To qualify, you need to be under 31 years of age and:
- have a degree/higher diploma obtained in the last 3 years;
- earn at least R7500 per month, and provide proof of your employment; and
- have the affordability to enter into a finance agreement.
While paying off your car based on a longer term may seem to be saving you money, consider taking on a shorter instalment if you can afford it. You want to pay off your car as soon as you possibly can to avoid lengthy and costly finance charges on your ‘baby’. Plus, paying off your car earlier can help you focus on other goals that need large amounts of money and commitment, and your credit profile will look amazing.
We know… you want that new car smell and that mint condition, but new cars can be costly, especially for first-time buyers. Consider employing the services of used car dealerships because the reputable ones often have the best deals on cars that do not look or feel “second best” at all. You can save a few thousand rands by taking a used version of your favourite car.
When buying a car, especially a used one, consider test driving each one you are interested in. This will give you a chance to get to know the car and really feel it. Use your test drive session as a moment to really check for any discomforts, sounds that are irregular, the wheel and steering alignment, how the radio works, brakes, gear, etc. This is your time to fully immerse yourself in your potential future ‘baby’. Plus, test drives are fun, so why not?
This stage of your life is exciting, and it is important that it remains so. Remember to always ask your car salesman as well as your financial services providers questions, and make the right buying decisions FOR YOU. We hope this cheat sheet helps in your car buying journey as a first-timer. We can’t wait to see you on the road.