The joy of buying your first car – here’s what you need to know

THERE is little that compares to the excitement of buying your first car. Today’s young buyers are spoilt for choice with the variety of makes and models out there. But the important lesson with any car-buying is to choose a vehicle that is within your budget.

We went with Caxton Durban’s senior journalist and social media influencer Nia Louw to enjoy her first car-buying experience and discovered what is required when buying your first set of wheels.

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To qualify for vehicle finance or a car loan, you will need a good credit record or credit score. Typical starting points for a young person to build a credit record are a retail store account or a credit card. These accounts will show the bank or finance house whether you are a responsible person who pays their required monthly payments consistently.

Apart from having a good credit record, the buyer needs to be a South African citizen aged 18 and above, have a driver’s licence, show proof of residence (utility bills not older than three months are preferred) and proof of income over a specified period.
Like any other loan, vehicle finance comes with interest payable on your monthly car instalments.

The interest rate on vehicle loans varies among finance houses. Currently, the prime lending rate is at 11.75%. It’s advisable to weigh up your options between fixed or variable interest rates on your car payments.

If you are comfortable with a monthly instalment that shifts, depending on the South African Reserve Bank (SARB) raising or lowering interest rates, then a variable rate is the way to go. But if you can’t afford your car payments going up, should the reserve bank raise the interest rate, then a fixed interest rate is preferable. Generally, lenders offer a lower variable rate than a fixed rate on a loan.

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Besides the terms and conditions of the lending institution, your vehicle-loan interest rate may be affected by the down payment you make, your credit score, your income, the length of the repayment period and the vehicle type. Most banks advise that no more than 25–30% of your annual income can go towards a vehicle, including insurance, petrol and maintenance.

The majority of vehicle dealerships can assist car buyers with insurance, which would be a stipulation for the car loan. The other option is shopping around for suitable car insurance when you know what model of car you will be purchasing.

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New vehicles are sold with manufacturer warranties and often include service plans, meaning that up to a certain number of kilometres, your car’s required services are not charged for. If purchasing a pre-owned vehicle that is out of warranty, there are many extended car warranties, service plans or maintenance plans available to assist you with future costs and breakdowns. Wear and tear does not fall under general car-insurance policies.

Before you let the feeling of independence take hold of you as you set out on adventures with your new car, take time to go through the vehicle’s driver’s manual. This will help you to learn about your first big investment and learn how to take care of it properly and not jeopardise any warranties or insurance covering your car.

Then it is up to you to be a safe and responsible driver while taking care of yourself, your passengers and other road users, and enjoy lots of happy and safe kilometres in your new car.

Nia Louw went to Toyota on Monday, October 9, to pick up her brand-new 2023 Toyota Vitz. Watch this video to see her journey to buying her first car with Toyota as she explains why the new Toyota Vitz was her first choice:

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