Seven steps to buying your dream used car

There are around 2.4 used vehicles sold for every new vehicle bought in SA, but not every buyer has a great experience with a pre-owned car.

It is a significant investment and the wrong choice can lead to years of disappointment. However, many of the risks can be mitigated by doing upfront research and shopping wisely.

Ernest North, co-founder of Naked Insurance, gives the following advice to acquire your dream secondhand car:

1. Set your budget

Do you have cash on hand to buy the car? If not, how much are you willing to spend every  month? Remember you will need to budget for insurance, maintenance and fuel in addition to the monthly repayment. Once you have a budget in mind, you can start to research your options.

TIP: Most banks and many car selling platforms have financing calculators on their websites – look at WesBank orAutoTrader, for example. You can play around with different financing amounts, deposits, residuals (balloon payments) and interest rates to get an idea of what your car repayments might be.

2. Research

Before you walk into a car dealer, you may benefit from reading reviews about cars, visiting car dealers’ websites to get a feel for pricing, and getting feedback from friends and family about their experiences with their cars. There are a few things you should know when you create a shortlist of brands and models you find interesting.

Which features do you care about: boot space, fuel efficiency, Bluetooth, electric windows, air-conditioning, and so forth?

What are the costs of parts and maintenance? What would you typically pay for a service? Remember parts for a premium brand or a car that isn’t manufactured locally are often more expensive.

What maintenance issues or faults do other drivers frequently report about the model you’re considering?

What is the mileage? You will ideally want a car with mileage that isn’t too high as it might might mean more maintenance costs.

3. Shop around

There are many places to source a used car. One of the best options is a reputable physical or online dealership that can offer you the car’s service history and registration papers for the vehicle you want to buy. Most dealerships that sell new cars from the major brands will often also sell certified pre-owned vehicles, giving you a little more assurance the car meets minimum quality standards.

While auctioneers may offer some bargains, you will usually be buying voetstoots (as is). Check the terms and conditions before you commit. Some auctioneers inspect their cars carefully before sale and offer quality guarantees.

The same goes for buying a car from a stranger via a classifieds site.

Buying from trusted friends and family can be a good option, but ensure you know about the car’s history and that you put an agreement in place about what to do if the car shows major faults shortly after you buy it.

4. Make sure the car is in good condition

Having narrowed down your list of models and cars, you can start visiting dealers. When you see something that fits your requirements and budget, you’ll want to check the car carefully to make sure it is in good condition.

Before you commit to the purchase, go for a test drive. Turn off the radio and listen for strange engine sounds. Pay attention to the handling – does the car drag to one side, for example?

Inspect the car carefully in a well-lit area. Look for bodywork damage or signs of repainting, check that the interiors look good, switch on lights, indicators and wipers to make sure they work, and open and close the bonnet, boot door and windows.

Ask to see the service history and look at the mileage.

Ask if the car has been in an accident.

Use vehiclecheck.co.za to find out if the police have any interest in the car or if there are any accident reports involving the car. You’ll need the car’s VIN number and R99.

If you are buying privately, it could be worth asking a mechanic to have a look. You can book through Dekra Automotive which offers a service to do this.

TIP: If the vehicle you’re buying is less than a year or two old, it may still have a warranty and service plan. Ask. If it doesn’t, it can be worthwhile purchasing one.

5. Negotiate the deal

Do homework to ensure you’re paying the right price. Check websites like Autotrader.co.za or Cars.co.za to see what cars similar to the one you’re looking at are selling for. You can also ask your insurer what the retail value is on the specific car you are looking at. Remember to ask about issues like worn tyres, small scratches and chips on the windscreen to be fixed. If the seller refuses, push for a discount.

6. Finalise financing

If you can afford to pay upfront for your car, that’s the best option because it will save you a fortune on interest repayments. If you can’t, you may need to borrow money. Most dealers have preferred lenders and can help you apply for a car loan. You will need proof of address and your ID. The dealership will apply to many banks and try to get you the best interest rate.

The more money you can put down as a deposit the lower your repayments will be and the less interest you will pay. Be careful about repayment terms. A lower monthly payment over a longer term will mean paying far more to the bank in interest.

7. Get insured

Insurance is a must for your peace of mind. Even if the car is a cheapie that isn’t worth covering with comprehensive insurance, third-party insurance will protect you from legal liability in the event of an accident. While third-party insurance will not cover damage to your own car, it will cover damage to other cars involved in an accident with you.

If you’re financing the car, the lender will insist you get insurance before you drive away. Many dealers offer insurance through the finance house or their own broker. However, it’s a good idea to source quotes independently to get the best deal.