1. Be practical. Carefully consider the vehicle you want to purchase in relation to its intended daily or weekly purpose. People often mismatch their heart’s desires with their brain’s logical thinking. For example, if you live in a traffic-dense area where you spend a lot of time in start-stop traffic jams, consider an automatic car instead of a manual one. Automatics are easier to drive, with no clutch problems and so on. Another example is when people buy off-road-biased 4x4s and SUVs that cost a fortune to run, while they hardly ever take them off the tarmac.
2. Cars are not investments. We often believe we are “investing” in a useful asset when buying a car, but we are so wrong. Yes, cars may take us from A to B, and perform certain other functions that make our lives a little bit easier, but they are essentially liabilities. Most will lose at least 25% of their value the minute you drive them out of the dealership.
3. Affordability is key. Experts suggest that your total car instalment should not exceed 15 to 20% of your net or take-home salary. So, if you receive R20 000 in your bank account every month, do not plan to pay more than R4 000 towards your car.
4. Check all available financing options. Scout around for the best financing deal for yourself. Don’t confine yourself to your favourite bank or financing institution as they may not see you the way another bank might. Ensure you choose a reputable financial institution. Your financier must be registered with the Financial Services Board as a financial services provider (FSP). Lastly, as far as this is concerned, the best advice we can give you is as follows: pay as high a deposit as possible – don’t limit yourself to the mandatory 10%, avoid balloon payments and the residual option as far as you can, and do not choose to exceed 60 months/five years for repayment.
5. Research the car’s true costs. A car’s sticker price is just the beginning of your expenses. Take a closer look at the options list versus what is being offered standard. Get the dealership to explain exactly how their service and maintenance plans work. You may need to pay extra for these if you want them. Then research as many of the commonly replaced parts’ prices as you can – items like the gearbox, tyres, windscreen and so on.
6. Do your homework. Dealership sales people exist to sell stock, not to tell you the honest truth about their cars. Therefore do yourself a major favour and read up and consult independent motoring publications extensively on your potential purchase(s). Focus mainly on reports regarding the driving experience, boot space, comfort features, fuel consumption and performance figures. The last two are where your salesperson can largely hold back on the truth. In fairness, he or she will simply be quoting the manufacturer’s figures, which are often misaligned with reality.
7. Obtain a list of cars most popular with thieves. This applies to many suburbs in South Africa, but there are popular makes and models that thieves and hijackers prefer. Generally speaking, they correspond to the most popular cars in the country. Ask your local police station for details.
8. Find out the car’s model year. Your target purchase may be on its way out, with a new version or completely new model on the horizon. This will affect its price, as the outgoing car is likely to be placed on special in its final months. At the same time, an all-new model will almost always be more expensive. Decide if you want the latest and greatest with all the freshest gadgets, or if you really just like the model as it is.
9. Request and compare five insurance quotes. With anything between 13 000 and 20 000 deaths caused by motor accidents annually, insurance is playing a much more important role in our lives. Shop around thoroughly for the best one for you, taking into account a number of important factors including price, types of cover, excess, and so on.
10. Get others’ opinions. Take a companion with you. Four or six eyes are generally better than two. Invite a trusted, knowledgeable companion to go car shopping with you. They’ll know you well enough to know many of your needs and can guide your prospective purchase accordingly. Remember, you have a seven-day “out” clause in your purchase if you do not sign immediately at the dealership. Take it and use it.
Article credit: http://www.destinyconnect.com/2015/08/12/10-things-to-do-before-buying-a-car/