Buying a car – whether it’s your first set of wheels, a brand-new dream car off the dealer’s floor or your uncle’s hand-me-down – is probably the single biggest purchase you will make as a recent graduate or young professional entering the workplace. So, before you even start looking at makes and models, make sure you are in the best position to get the best deal on the vehicle of your choice by arming yourself with knowledge. They say that “knowledge is power” and it certainly is a powerful feeling if you can finalise the deal to buy the car you want at the best possible price.
Being that the choice of vehicles is vast -with new models constantly being introduced to the market it can be overwhelming to know where to start and whose advice to take. With these useful tips from WesBank to guide you, the complex car-buying process will be less daunting, resulting in the best outcome for you – in terms of a smart buy that suits your budget.
Head vs. heart
It’s important to approach the entire car-buying process with a level head. This could mean losing the idea of driving the red convertible of your dreams (for now), and rather considering the most practical and affordable vehicle for your current needs, budget and situation. Temporarily put the dream on hold, and be practical – head over heart. Next, research the various makes and models that fall into the practical column, and start assessing each one against your needs, considering the total cost of vehicle ownership which includes: monthly instalments, service and parts, maintenance, insurance and fuel. Now you are able to narrow down the choices.
Negotiate price within your budget limit
Buying a car should not an impulse purchase. Take your time, do your research and visit reputable websites, showrooms and used car dealerships to assess what your options are within your set price bracket. If it’s a used car you’re after, set your sites on the best option, with a full service history and with the lowest mileage that suits your budget. You can request written quotes on the cars you look at, to use as a bargaining tool to your advantage when the price negotiations start. Know what your limits are, and don’t shy away from negotiating on the price – remember, if you don’t ask, you won’t get, you have the power to walk away from a deal if it doesn’t suit you. The salesperson is as eager to close the deal as you are to drive off in your new car – don’t compromise until you are completely satisfied that you are getting the best agreement possible.
Now you have to pay
Although cash is king, most people will require some sort of financial assistance when buying a car. Before you sign on the dotted line, you can work out how much you can afford to pay on a monthly instalment with a useful tool such as the WesBank Calculator. Again, with the right amount of knowledge, you can negotiate the optimum finance deal for your situation. Putting down a deposit (as much as you can afford) will pay off in the long run, saving you mega bucks on interest charges over the payment period. Also, try and negotiate the finance deal over the shortest period with the lowest interest rate. Putting down cash for any upgrades or extra warranties is another money saver if the budget permits.
Don’t skimp on insurance
While insurance is often considered to be a monthly ‘grudge’ payment, it’s when you don’t have it and an unfortunate accident happens that you realise its true value. If your car is financed, you will need to take out comprehensive insurance – but, again, you can shop around for the best deal on your vehicle. If you are buying a second-hand car and it’s not financed, you might opt for insurance that covers third party, fire and theft. Research your car’s retail, market and replacement values to ensure you are not underinsured. Vehicle insurance should be a non-negotiable budget item when you drive a car on South African roads.
Once you have chosen your make and model, test drive the car at different dealerships, or through private sales, and compare prices and the financing terms on offer. Only make your final choice when you are completely comfortable with the deal.
“Buying a car is a personal and emotional purchase. You are parting with a big portion of your hard-earned cash, so you want to make sure you get the best deal for your Rand. By following these tips and equipping yourself with knowledge and research before you make your final choice, you stand in good stead when you buy your car, and over the years as you pay it off,” says Kutlwano Mogatusi, Communications Specialist at WesBank.
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Phuti Mahanyele – Former CEO of Shanduka Group, current Sigma Capital Executive Chair: At 17, she left South Africa to pursue her studies, and obtained a bachelor\’s degree in Economics and earned an MBA from De Montfort University. She would also later go on to complete Harvard University\’s Kennedy School of Government executive education programme. Determined to be a success, Mahanyele joined an international investment banking company specialising in infrastructural development in New York City called Fieldstone Private Capital Group. She later became Vice-President of the firm, then transferred to the company\’s office in South Africa. After returning to South Africa, she became the head of Project Finance South Africa at the Development Back of Southern Africa. She was headhunted, and advanced to the position of managing director of Shanduka Energy, later becoming the CEO of Shanduka Group. She would go on to hold this position for 10 years, securing major deals including those with Coca-Cola and McDonalds. In 2007, she was selected as a Global Young Leader by the World Economic Forum. In 2009, she won the Rutgers Visions of Excellence award and The Most Influential Woman in Government and Business award from Rutgers University. In 2011, she was named one of the 20 youngest power women in Africa by Forbes. In 2013, she won the Distinguished Achievement award by the Douglass Society.