New or pre-owned – choose wisely

Apart from buying property, acquiring a car is most likely the biggest financial decision most people will make during their lifetimes.

And because a very small percentage of people are blessed to have the kind of cash required to buy a car lying around, having your vehicle financed is the most accessible way to own a set of wheels.

But vehicle finance binds you into a contract with a financial institution that dictates prompt repayments over a number of years which includes an initiation fee, interest and monthly admin fees. In other words, it’s not like buying a shirt you can replace tomorrow if you grow tired of the colour.

And especially with the impending economic recession to follow the coronavirus pandemic, your choice of car is of utmost importance. And the first step is to decide on a new set of wheels or a pre-owned car.

The thought of a car straight “out of the box” has always been top of most people’s wish lists. American comedian Rita Rudner famously said: ‘’To attract men, I wear a perfume called ‘new car interior’.’’

But just because a car isn’t ‘’out of the box’’, doesn’t mean that it is in any way inferior to one straight off the production line. In fact, to give vehicles that is not new anymore on sale a better ring to it, the description of ‘’second hand’’ has over the years been preplaced by more prestigious marketing terms like ‘’pre-owned’’ or ‘’previously loved’’.

Most manufacturers have their own certified pre-owned division like Toyota’s Automark.

South Africa’s pre-owned market is huge. It is estimated that for every one new car sold, almost two and a half pre-owned vehicles find new homes. And with the tough economic times that lies ahead, the ratio is expected to increase even further.

Most manufacturers have their own pre-owned division which sells only certified and strenuously inspected cars to give buyers great peace of mind. This is usually a good place to start when you are looking at demo models or newer pre-owned options, as these cars should still have some balance of a service or maintenance plan and warranty left. And these plans can usually be extended through the manufacturer itself.

As cars get older and accumulate higher mileage they may not meet the strict criteria set out by these reputable dealerships anymore they often end up at lesser recognised establishments or get sold privately as they might be too old to qualify for vehicle finance. These cars are more affordable, but they are older and mostly outdated models and the wear and tear that comes with higher mileage and a potential lack of or partial service history make them a much higher risk. And because of this, very few of them should qualify for any kind of meaningful warranty cover.

Once you have determined what you can afford on car repayments per month and the type of finance you want, while also taking insurance, fuel and other maintenance costs into account, you can start your search and research in all earnest. If you are able afford to spend R134 900, which is the price of the Suzuki S-Presso 1.0 GL, the most affordable local new passenger car, a new set of wheels is in play.

At R134 900, the Suzuki S-Presso 1.0 GL is the most affordable new passenger car in South Africa.

And when you are shopping in the price bracket of a new car, options are endless as far as manufacturers and models go. For every handful of similarly priced new models on the market, there will be a myriad of pre-owned options in the same price bracket. And these pre-owned options might not carry the obvious perks as brand new ones, they usually offer very attractive deals as they should be better specced, more luxurious, bigger, stronger or any combination of these things. And the older these pre-owned cars are, the more value they will offer in terms of overall spec as they become more affordable because of depreciation.

If you value peace of mind and dependability over comfort and luxury, you might prefer a new or low kilometer pre-owned car. If you are prepared to sacrifice peace of mind for more speed or greater comfort, then it’s probably an older pre-owned car you’re after.

It’s not a given that a new or pristine pre-owned car will be a failsafe option, or that an older pre-owned car will be a liability. There are plenty of horror stories involving very problematic new cars or demo models, while there are plenty of older pre-owned cars that never give their owners any issues.

The higher a pre-owned car’s mileage, the bigger the risk factor it becomes. Picture: iStock

Whatever your preferences are, research is key. The more questions you ask, the better you’ll be off. If you are buying a new car, try and determine if that particular model holds its value down the line. If you buy a pre-owned car from a reputable dealership, check the vehicle’s service history. If you buy it from a less reputable place or privately, double check everything and insist on a technical inspection. Make sure you know what your routine maintenance costs will be. Be sure to know what your insurance costs will be. Try and establish what your fuel consumption might be taking your daily traffic conditions into play.

The last thing you want to have a few months or a year after you buy a car is regret, especially if you made a bad initial decision, so choose wisely.

Taking ownership of a brand new car tops most people’s wish lists. Picture: iStock

Things to consider when buying:

New car

You get to choose the exterior colour of the vehicle, the interior finishing should there be an option plus whether or not you want any optional extras fitted

You are the very first owner of a car that has done no more than the delivery kilometers on its odometer, has no service or accident history

You get full value for the warranties, service or maintenance plans and any roadside assistance that is included in the price

You can bargain for a better price between dealerships

Some new cars are sold with comprehensive insurance cover for the first 12 months which is included in the selling price

Pre-owned

The balance of the remaining time or kilometers on the service or maintenance plan and warranty is carried over to the next owner, with most manufacturers also offering flexible extensions at an additional cost

Financial institutions have restrictions based on the age of the year, the mileage and the general condition

Manufacturers keep centralised records of all services and work done to every car through their dealership network, making it easy to prove a car’s actual service history should there be any doubts

Unless the vehicle’s previous owner or owners are closely connected or related, you will never truly know how to which types of driving style the car was exposed to

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