South Africa's automotive industry is thriving, particularly when it comes to used cars.
As the economy rebounds and consumers become more conscious of their spending, the demand for used cars has surged.
According to the Research and Markets website, South Africa boasts the largest vehicle market in Africa, driven by both sales and exports. While the car industry took a hit during the pandemic, it has since bounced back to pre-2020 levels.
For most of us, buying a car is the second-biggest purchase (after buying a home) we'll ever make, so it’s not something we take lightly. Buying a car second-hand makes achieving your dream more affordable.
Here are five things to do to ensure your car is the best fit for you:
Use your head, not your heart -
It’s easy to let excitement take the wheel, but stay focused on your needs, not desires. If you have a long daily commute, a fuel-efficient, eco-friendly car could be your best bet. It’s important to consider your full budget – not just the monthly repayments but the overall cost of ownership.
Do your research -
Knowledge is your best tool when negotiating. Research prices beforehand, and don’t hesitate to ask other dealerships for written quotes. You’ll often find better deals as dealerships approach their financial year-end or when salespeople are working to meet targets.
Cash or credit? -
Paying cash upfront is the best way to avoid interest payments, but not everyone has that luxury. When financing, aim for a shorter loan term with a lower interest rate. While you might pay slightly more every month, you save in the long run. If possible, put down a deposit of 10 - 20 per cent and pay for upgrades and warranties in cash to save down the road.
Leverage your old car -
If you’re looking for an upgrade and you’ve kept your old car in good condition, you can use it as a trade-in or sell it privately to offset the cost of your new car.
Affordable insurance -
Your new car will likely require more expensive insurance than your old one. Choose the most affordable plan that still offers comprehensive coverage.
A balloon payment is a large final sum due at the end of a car loan, designed to reduce monthly payments.
However, if the car is stolen or written off and only insured for market value, you may still owe a significant amount.
To protect against this risk, you can get balloon payment insurance, which covers the outstanding amount – or top-up insurance to handle credit shortfalls.
These options help avoid financial strain in such situations.
Whether you want to make your car work better for longer, want to use it as a trade-in for your next car, or simply want to save on insurance, these practical tips will help you keep your car in tip-top shape, even if you’re working from home:
- Service regularly, even if your car is parked for long stretches of the day or week.
- Use your gears, not your handbrake, while parking.
- Avoid flat batteries and tyres.
- Protect the paintwork by parking under cover or in a garage, wherever possible.
- Hit the road. This recharges your car’s battery, clears rust on brake discs, and lubricates moving parts.
Your car is one of your most expensive, most utilised possessions.
Most car financing institutions insist on comprehensive car insurance to protect their risk. Below is a comparison of car insurance options, plus everything you need to know about car insurance to make the best decision for you and your car.
There are many options when it comes to car insurance.
This covers the amount you are legally liable for to another party.
This includes 3rd-party cover benefits, but only if the loss or damage is due to fire, lightning, explosions, theft or attempted theft, and includes any liability relating to the vehicle.
Comprehensive cover is complete cover as it covers accidental loss or damage to the vehicle including 3rd party cover.
Santam has these additional car insurance options:
4x4 and off-road vehicle insurance
This covers the unique risks associated with owning and driving a 4x4.
Luxury vehicle insurance
This executive car insurance covers the higher costs and risks of owning and driving a luxury vehicle.
Now that you know more about what vehicle cover options are available, you need to know how much you’re going to pay. Did you know that insurance companies look at several criteria before determining what your premium will be?
Some cars are a lower theft risk or are more expensive to repair than others. It’s not just about the make or model of your car – these aspects affect your premium:
- Your self-payment portion (your excess) – the higher the excess, the lower the monthly premium.
- The type of car insurance you choose, e.g., private or business use, and who will be driving the vehicle.
- Your insurance history – if you are a high risk or not.
When choosing an insurer, choose one that offers a policy tailored to suit your needs and your budget. The right insurer is not necessarily the one with the lowest premium, but the one that ensures you have adequate coverage at the lowest price.
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