Are you looking to buy a new car in South Africa? There is always much excitement when it comes to buying a car, either new or used. Buying a new car is always exciting as you could choose the vehicle specifications right down to the colour of the vehicle. The only problem is as soon as you drive it off the floor, the resale value decreases quite significantly.
Buying a used car can be relatively attractive, as you can save quite a bit of money when purchasing a car. Before spending hours on the internet looking for the right used car, there are some facts that one has to consider when doing so.
Used cars are more affordable than new cars1
Used cars will be significantly more affordable than buying a new car. This is possible because of the financial depreciation of a car’s value over the years. Just keep in mind when it comes to a high-end or vintage car; this might not be the case as they will most likely keep their resale value. So, when it comes to buying a used car under normal circumstances, you won’t be paying close to what the original price of the car was. This is a benefit for someone who is on a tighter budget when it comes to buying a car.
Even though the used car will still depreciate after buying it, it won’t be near as much as when you buy a new car. Just remember to do some research before buying a used car. Check what the market value is on the vehicle to ensure that the purchase price isn’t too high or too low when considering the depreciation. The depreciation of a car can drop by 65% of its value within five years of ownership, allowing the purchase of the used vehicle to be at a more affordable rate.
Used cars will be inspected and certified1
Used car dealerships will usually do a thorough inspection on a used vehicle and will also confirm that they are certified roadworthy. This inspection may reduce your cost when buying the vehicle.
Certified used vehicles may also come with the benefit of an extended warranty, special financing and many other benefits, compared to a new car which is only assured by the dealership for it being brand new. When used cars are inspected, dealerships often fix and repair the vehicle where it’s needed and make sure that the car is spotless inside and out.
Warranty options for used cars1
Some used cars might still have the balance of the warranty that was carried forward from the previous owner, especially if the car is not older than five years. This can save you on costs in the event that something goes wrong with the vehicle.
If the car’s warranty has expired, the dealership could offer you an extended warranty either from the original manufacturer or an outside party. This is beneficial as your car will always be worked on by highly trained, professional technicians.
A used car could come with underlying problems1
This can be one of the biggest cons when it comes to buying a used car. If you are not aware of any problems prior to buying the car, it can be a costly affair that you didn’t bargain on. Dealerships will try and remedy the vehicle to run smoothly, but after some time, these problems could re-occur.
By law, when the seller sells the car to the dealership, they have to disclose to the dealership if there are any problems or not. Unfortunately, this is not always guaranteed.
Car insurance for used cars can be more affordable1
One of the major benefits of buying a used car is that the insurance will be lower than a new car. Because of the depreciation of the car’s value, your insurance will cost a lot less. Are you looking for affordable car insurance? A wide range of affordable car insurance products is available with PMD.
You will most likely have to compromise with a used car1
You will most likely have to compromise on the colour of the car when it comes to choosing the right mileage and specifications. You might have to look for a second option as the dealerships may not have a car that matches exactly what you want, or might not be able to source something for you either.
This article was prepared by Eric Sandmann in his personal capacity. The views and opinions in the article should not be attributed to anyone but the author unless expressly stated. Nothing in this article should be relied upon as advice, this publication is presented for informational purposes only. No person should act or refrain from acting in reliance on any information found in this article, without first obtaining proper financial advice from the appropriate professional. The author makes no claims, promises or guarantees about the accuracy, or completeness, of any information linked from, referred to, or contained in this article. The author reserves the right, to edit and change the content of this article.
— Arrive Alive (@_ArriveAlive) October 25, 2019