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New or used? Guide to buying your next car

vuyi on February 13, 2023

Buying a car, new or used, is a big commitment, but with proper planning it does not have to be a daunting one.

There is a vast selection of cars available from a large variety of sellers, making it difficult to find the one that’s right for you. The first thing to do is to ask yourself how much you are prepared to spend on a car and to be realistic about what you can afford.

New or used, that is the question

Which of these is the correct choice? There is no right or wrong answer, but understanding the pros and cons of each is vital for making the best decision for you.

Benefits of buying a new car

The upside of buying a new car is the certainty of knowing exactly what you are buying. No one else has ever owned it, and there’s a guarantee that it has no hidden secrets from previous owners.

You also get the advantage of a full manufacturer’s warranty and in most cases, a service or maintenance plan. These plans can vary from brand to brand in terms of length of validity periods and what’s covered, so do your research and compare what’s on offer from different manufacturers.

Benefits of buying a used car

Choosing a pre-owned car or an earlier year’s model might be more prudent for your purposes. Some used cars, including dealer demo models, are often in almost new condition and still benefit from lengthy aftersales warranties and service plans, with reasonably discounted sticker prices depending on mileage and age.

Most car brands also offer approved pre-owned programmes, meaning these cars come with some added benefits such as extended aftersales plans and guarantees. They also undergo thorough checks by certified workshop technicians in order to get the stamp of approval for ‘approved’ status.

While depreciation is an unavoidable reality of owning a car, used vehicles almost always suffer less depreciation from purchase price than a new one. In other words, the original owner, who bought the car new has already incurred a significant amount of depreciation simply by taking ownership. When buying a used model, you’re starting off from a lower initial outlay and the effects of depreciation are felt less in your wallet.

There are some excellent deals to be found in older model used vehicles, but it can also be a riskier purchase as vehicles’ histories get cloudier as they age. Try to identify cars with full service histories, and even better are those with full histories at official franchise dealers. Also, try to take a trusted mechanic with you to view an older car to make sure there are no major issues before taking delivery.

It’s also worth considering buying extended warranties, either from the manufacturer itself where applicable or from a third party.

Start with a budget

The most important part of the car-buying journey is compiling a list of all current expenses and income. It is important to shop around and compare car prices to find a sensible and affordable car that fits within your budget. Don’t forget to budget for fuel, insurance, tyres, service costs and more – and remember that these costs can change over time.

It is also advisable to build some leeway into your budget to accommodate for rising fuel prices, interest rate increases and unexpected costs associated with driving.

Choose a reputable dealer

If a deal seems too good to be true, it normally is. It might be tempting to buy a newer, fancier car advertised at a low price by a small independent dealer or private seller, but you must let common sense prevail. There is probably a reason why that car is priced the way it is, and you might run into issues with it down the road.

It’s safer to do business with reputable dealers who will go to great lengths to protect their reputation through quality products and customer service.

Good start to the new year with impressive January car sales figures

vuyi on February 2, 2022

By H&H Admin

An increase in the cost of living at the start of 2022 did not discourage South Africans from buying new vehicles during January.

South Africans were faced with fuel price hikes and another increase in interest rates as the new year started, but that didn’t deter them from buying new vehicles during January.

According to naamsa | the Automotive Business Council, January new vehicle sales increased 19.5% to 41,382 units compared to the start of 2021, creating a solid start to the year and the market’s continued recovery.

“January new vehicle sales kicked off the year at similar levels to the momentum created during the second half of 2021,” says Lebogang Gaoaketse, Head of Marketing and Communications at WesBank, referring to four months of sales in the period exceeding 41,000 units. “While some purchase decisions may have been deferred out of December into the new year, January sales provide a solid start to the year, raising the hopes of manufacturers and dealers for ongoing market improvement.”

While year-on-year comparisons remain difficult to interpret because of differing pandemic circumstances, WesBank remained positive for a continued slow recovery of the market during 2022.

Both passenger cars and light commercial vehicles (LCVs) started the year positively, increasing 26.6% and 3.8% respectively. Dealer sales in the passenger car space out-stripped the overall market, increasing 33.7%, a very positive sign of consumer demand.

Sales into the rental market also indicate an increase in business confidence and a more positive outlook to tourism with sales in the channel up 21% during January.

“While gradual interest rate hikes are inevitable over the course of the year from their record lows, their impact should be considered within purchase decisions and affordability,” says Gaoaketse. “Rising costs of living amidst more slowly recovering earnings are expected to continue placing pressure on household incomes and the wherewithal for consumers to afford new vehicles during 2022. But price inflation in the pre-owned market and necessary replacement cycles some two years after the onset of the pandemic should be expected to fuel demand.”

Here are the sales figures for October 2021

vuyi on November 4, 2021

Press Release: WesBank

Stock shortages continued to thwart South Africa’s new vehicle market during October. However, the market continued to show a robust performance, despite the volumes being lower than September.

According to naamsa | the Automotive Business Council, 41,035 new vehicles were sold during October, an increase of 6.1% over the same month last year. Although September sales were the second-best volume month this year, October sales were 4.9% slower than last month. It is also important to note the context of October sales within the four months this year that have sold more than 40,000 units.

“The new vehicle market appears to be recovering strongly, demand out-stripping current supply constraints,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank. “The second half of the year has performed strongly since the mid-year lockdown restrictions, with the market trading above 40,000 units a month for the past three months.”

WesBank’s own data indicates a resurgence in the South African motor industry. “While we have seen high demand for pre-owned vehicles over the last two years, a slow shift back towards new vehicles may be currently underway,” says Gaoaketse. “Compared to a year ago, applications for to WesBank for new car deals rose 1.8% during October, while applications for pre-owned deals declined 5.9%. In addition, the bank’s used-to-new ratio has shifted over the 12-month period from 2.25 used vehicles financed for every new vehicle a year ago, to 2.08.”

However, the issue of supply is a global factor that skews the overall market picture. “Until global manufacturing stabilises off the back of the pandemic and resolves its micro-chip shortages, consumer and business purchase decisions will be swayed by availability and necessity,” says Gaoaketse. “The good news is that South African car dealers are in a much more sustainable position than a year ago.”

South Africa’s new passenger car market was up 3.1% to 27,496 units, displaying a robust consistency throughout the year. The Light Commercial Vehicle (LCV) market remains far more volatile. While it was down 10.9% in September, the segment bounced back to increase 15.9% during October to 11,188 sales.

A similar trend played out in the dealer space with passenger car and LCV volumes up 2.7% and 16.5% respectively. The market once again benefited from a sizeable volume of rental sales, with 5,002 passenger cars and 730 LCVs selling into fleets.

“Although the market looks in better shape, affordability continues to be a major consideration,” says Gaoaketse. “Significant fuel price hikes this month and the prospect of interest rates potentially increasing with the return of inflation are factors for consumers to consider when purchasing their next vehicle.” 

New Vehicle Sales Recovery Back On Track

vuyi on October 6, 2021

The new vehicle market continued to recover some momentum during September following the disruptions experienced in the economy during July. Building on August sales successes, September sales continued to capture reassuring consumer demand and provided some reassurance for a stronger final quarter.

According to naamsa | the Automotive Business Council, September new vehicle sales increased 15.8% to 43,130 units compared to the same month last year. More reflective of actual performance, the month’s sales were up 4% relative to August sales, which was the second-best sales month this year prior to September’s performance.

Although new vehicle sales are 30.1% up year-to-date to 345,172 units compared to the same pandemic-impacted period last year, WesBank continues to finance well over two used vehicles for every new vehicle.

While demand in the pre-owned market remains very strong, used car price inflation may begin impacting this momentum.

Lebogang Gaoaketse, Head of Marketing and Communication at WesBank.

The sales mix across new and pre-owned is an interesting factor impacting the sustainability of the motor retail sector during the pandemic.

“While the manufacturers are naturally focused on selling new vehicles, the pre-owned market influences brand affinity. However, on a retail level, sales are sales, whether new or used, providing mobility solutions to customers and cashflow for dealers,” says Lebogang Gaoaketse, Head of Marketing and Communication at WesBank.

There’s no denying that the motor industry is facing unusual times. What has been prevalent throughout, however, is the sector’s unfailing resilience to prevail.

“While demand in the pre-owned market remains very strong, used car price inflation may begin impacting this momentum. That demand may become more about preferential specification than affordability in a time when the trade is paying a premium on certain pre-owned models,” says Gaoaketse.

“While stock availability in the new vehicle market remains stressed, forcing some consumers into the pre-owned market, the sheer demand remains encouraging for the industry once global stock shortages are alleviated,” Gaoaketse continued.

Most impacted by that stock situation is the Light Commercial Vehicle (LCV) market. LCV sales declined 10.9% during September compared to September 2020 to record 10,943 sales. This is 802 units or 6.8% less than last month. While dealer channel sales in this segment were less affected (down 7.2%), there is a noticeable lack of Government volume (down 64%) impacting the segment.

Driving the market growth was the 30.5% gain in passenger car sales year-on-year. September’s passenger car volume of 29,538 units was bolstered by 4,951 sales into the rental market and was 8.5% ahead of last month’s market. Dealer sales also swelled 17.3%, providing that much-need sustainability injection into the retail space.

“The Reserve Bank’s decision last month to maintain interest rates will continue to provide stimulus to the market, whether new or used with both sectors’ sales ultimately contributing to the overall recovery of the South African motor industry,” Gaoaketse concluded.

Demystifying vehicle finance lingo: Part 2

vuyi on March 11, 2021

It’s all very well to find a car that you both like and can afford, but you also need to understand all the financial jargon that comes with making the purchase. 

There is no shame in admitting you don’t know about the warranty, total cost of ownership or service plan. While all these terms can be intimidating the first-time round, asking questions will ensure you become vehicle finance savvy. 

Here’s the second installment of our 2-part guide to understanding vehicle finance jargon which will help you make the right choices:

“There isn’t a one-size-fits-all solution to structuring a car finance deal. By being totally honest with yourself and knowing how much you can realistically afford on the vehicle repayment, you are on the best-informed path to owning a car. As a responsible lender, WesBank will only provide credit for an amount that you can afford to pay back.”

– Kutlwano Mogatusi, WesBank Motor’s Communication Specialist
  1. Total cost of ownership: As mentioned, there’s more to owning a car than paying the monthly instalment. You need to budget for the running costs too – fuel, insurance, licence, servicing, maintenance, tyres and brakes, tolls, maybe the odd speeding fine! It’s important to buy a car you can afford even if it’s not yet the car of your dreams.
  2. Insurance: There are plenty of tempting insurance offers to choose from, however, WesBank recommends comprehensive insurance cover for a first-time car owner. This will cover you in the unfortunate event of accident damage, theft or vehicle write-off, plus you are covered for third party damage, which is damage to another vehicle in the case of an accident. The high risk of driving an uninsured vehicle is just not worth it.
  3. Warranty: A new car usually comes with a manufacturer’s warranty that would cover a faulty fuel gauge for example, but not general wear and tear on the brakes. It lasts for a certain time period but the finance provider, such as WesBank, can extend the warranty period, and can also offer you a warranty when buying a used car.
  4. Service plan: Usually covering the cost of a standard service, a service plan pays for your car’s regular services at set intervals (period of time or kms driven) as stipulated by the manufacturer. Be sure to understand what repairs or parts are excluded from the plan to avoid a nasty bill following a service.
  5. Maintenance plan: Maintenance plans differ in what they offer but most include the cost of servicing plus general vehicle wear and tear repairs to keep your car running efficiently. Again, make sure you are 100% clear on exactly what the plan covers and what is excluded.

“Now that you understand the jargon and consider yourself to be vehicle finance savvy, all that’s left is to check the vehicle finance agreement, including the small print, and sign on the dotted line – but, only once you’re satisfied with all the terms and conditions. Then, you are ready to safely take to the open road in your very own car,” says Mogatusi.

Demystifying vehicle finance lingo: Part 1

vuyi on March 11, 2021

It’s all very well to find a car that you both like and can afford, but you also need to understand all the financial jargon that comes with making the purchase. 

There is no shame in admitting you don’t know what a balloon payment is, or the difference between fixed and linked interest rates. While all these terms can be intimidating the first-time round, doing research will ensure you get the best financial deal on your set of wheels. 

Before you get to the part where you drive off in your car, let’s get back to understanding the payment deal to make sure you sign up for the best financial plan that suits your needs and more importantly, your pocket. 

“Car ownership is more than the initial price tag. A customer will need to consider monthly repayments, plus the added costs of fuel, comprehensive insurance cover and general maintenance and service expenses when buying a car.”

– Kutlwano Mogatusi, WesBank Motor’s Communication Specialist.

Here’s the first of our 2-part guide to understanding vehicle finance jargon which will help you make the right choices:

1. Interest rate: The interest rate affects the amount a bank charges you for borrowing money and the amount you need to pay back is determined by the interest rate on your finance agreement. The current low interest rate is good news for anyone repaying a vehicle finance loan.

2. Fixed or linked interest rate: You can choose between a fixed or linked (variable) interest rate on your vehicle finance agreement. As it says, a fixed interest rate remains the same, as does your monthly instalment. A linked rate fluctuates with the prime interest rate set by the South African Reserve Bank – if the rate increases, so will your payment but if the rate goes down, you will benefit from a lower monthly payment.

3. Deposit: This is a cash amount you pay upfront before the vehicle finance agreement starts. This amount is deducted from the price tag, so it makes sense that the bigger the deposit you can pay, the less you will owe on the car in the long run.

4. Finance period: The finance period is the length of time you agree to in the contract to pay off the car. It affects your monthly instalment and interest amount. A longer period may mean a lower instalment but the interest adds up so you could end up paying more. A shorter payment period might incur a slightly higher monthly payment but lessens the interest paid out in the long term, which is a good thing.

5. Balloon payment: A balloon payment is a lump sum amount that still needs to be paid at the end of the vehicle finance contract. So, on the upside, while it reduces your monthly instalment for the contract period, you will need to settle it in full at the end, so be cautious of this payment option. Because you may end up paying more interest in total in the long term, you need to make sure you have budgeted and saved enough to pay off the outstanding balloon payment. This amount however can now be refinanced, which will extend your term to pay back the car loan. 

“Now that you understand the jargon and consider yourself to be vehicle finance savvy, all that’s left is to check the vehicle finance agreement, including the small print, and sign on the dotted line – but, only once you’re satisfied with all the terms and conditions. Then, you are ready to safely take to the open road in your very own car,” says Mogatusi.

New Versus Pre-Owned – Which Car Is Right For You As A Graduate?

vuyi on October 20, 2020

Affordability may be the most important factor to consider when deciding what car to buy

– Lebogang Gaoaketse, WesBank Head of Marketing and Communication

As a first time buyer, it is easy to get overwhelmed, or even carried away, with the reality of purchasing your first car. You may get the feeling that everything is aligning in your life to get your first set of wheels, but there are many things to consider when making this budget-impacting purchasing decision.  

One of these could be your lack of credit score if you have only recently entered the job market. Under normal circumstances, this could be a negative consideration when trying to raise finance to buy your chosen car. However, thanks to finance offerings such as WesBank Graduate Finance, this is one less thing to worry about. The application process to check affordability and get approval for a vehicle finance deal can be done online, and it only takes a few minutes.

”Affordability may be the most important factor to consider when deciding what car to buy, but there is another important decision to make. This is deciding whether to get a new or a pre-owned car. While your dream car may be the latest flashy model on the showroom floor, with all the added extras including cool rims and a high-end sound system, the reality is that you need to buy within your budget,” says Lebogang Gaoaketse, WesBank Head of Marketing and Communication.

“That might just be the pre-owned car next to your dream car that is in great condition, has low mileage on the clock and, most importantly, is affordable. It is a significant choice for you to make because each option carries its own set of considerations. Talk about adulting, right?”

You also need to remember that there are more costs involved when buying your first car than the monthly repayments. While the right time to buy your first car could be now, affordability is key. Make sure you take into account all the expenses that come with independent mobility and act responsibly when making the financial commitment.

If you are considering buying a brand new car, budget permitting, WesBank advises that you place the most emphasis on getting value for your money. This includes not compromising on the car’s safety features such as ABS brakes and airbags, and what your needs are with regards to space and add-on extras. You need to also make sure that you understand the details of your contract. Buying your car from a licensed and WesBank approved dealership is recommended.

Nothing beats the smell of a new car, except perhaps the smell of a perfectly valeted pre-owned car that fits your budget more comfortably

– Lebogang Gaoaketse, WesBank Head of Marketing and Communication

In the case of a new or pre-owned vehicle purchased through a reputable dealer, you are likely to be offered an extended motor plan, service plan or warranty as part of the purchase agreement. These are insurance-related products and are aimed at protecting you from unforeseen costs down the line such as a vehicle breaking down.

It is advisable to consider including plans such as these, budget permitting, that offer a little extra peace of mind further down the road. These options can take some burden off your wallet when the time comes to pay for the car’s services and general vehicle maintenance after any standard maintenance plans and/or warranties expire.

Remember those other recurring financial obligations besides the monthly instalment we mentioned earlier? Fuel is an ongoing cost when driving around town, so consider a car that is fuel efficient. Taking out comprehensive insurance cover is a non-negotiable, and premiums can vary depending on the car you choose, so do some research with your insurance provider ahead of signing. You may also consider installing a vehicle tracking device as an additional security measure and, although this comes with a monthly payment, it could also mean a reduction in insurance premiums. All these costs need to be managed and included in your budget.

How you tackle this big decision-making process will determine the overall experience of buying and owning your very first set of wheels

– – LEBOGANG GAOAKETSE, WESBANK HEAD OF MARKETING AND COMMUNICATION

If a pre-owned car in good condition is what you decide on, WesBank offers the following advice:

  • Firstly, check the service history of the car. Pre-owned cars should have a full-service history (FSH) that will inform you whether the previous owner took the car to a licensed service centre, whether the car was serviced timeously and if the FSH does indeed reflect the real condition of the car. A car without a recorded service history may come at a reduced cost, and seem like a great deal, but can be risky in the long run.
  • Secondly, the Vehicle Identity Number (VIN) serves as the fingerprint of the car. The VIN found on the license disc must match the one on the car (usually stamped where the windscreen meets the dashboard). It’s a lengthy number but inspect it carefully and, and if anything doesn’t match, enquire with the dealer as to why. Even more advisable is to walk away.
  • Thirdly, it is important to find out if the car has been involved in a major accident. The effects of a major accident could result in mechanical damage to the vehicle that could present costly problems down the line. WesBank recommends that you ask someone knowledgeable, such as a trusted mechanic, to inspect your chosen vehicle before you sign for it on the dotted line.
  • Fourthly, a test drive is the only way to get a solid impression of a car’s driving dynamics, features and comfort levels. Don’t just drive around the block: take the time to check the comfort and size of the car and how it handles on a variety of roads. Listen carefully for any strange noises and if anything doesn’t seem right ask the salesperson if they would be willing to investigate and repair any issues. If you’re unhappy with anything, make it known and feel free to move on if you’re uncomfortable. Test drives do not come with any commitment to purchase. Finally, don’t feel pressured or obligated to buy the car the same day – take time to think it over.

“Nothing beats the smell of a new car, except perhaps the smell of a perfectly valeted pre-owned car that fits your budget more comfortably. Ultimately, the choice is yours. Either way, take your time, do your homework thoroughly and ask as many questions as possible. How you tackle this big decision-making process will determine the overall experience of buying and owning your very first set of wheels,” says Gaoaketse.

Selling your car just got easier and more convenient with Match!

vuyi on October 8, 2020

The national lockdown has affected the South African automotive market in a multitude of ways, but not only negatively.

As buyers and dealers adapt to doing business amid “The New Normal”, it’s most convenient – and socially responsible, given the impact of Covid-19 – to utilise the internet to facilitate business transactions, including when you sell your vehicle to a dealer.

It’s for that very purpose that Cars.co.za – the country’s biggest online automotive platform and one of the most respected, recognisable brands in the vehicle-retail space – created Match! It’s a service that empowers consumers by offering them a simple alternative to selling their vehicles privately, as well as a way to get the best possible market value for their cars.

Match! represents a quick, simple and safe way to offer a vehicle to hundreds of dealers (who are looking to increase their inventory) and, best of all, it costs the seller absolutely nothing. Plus, dealers contact owners directly, which saves time and effort. The service demonstrates that Cars.co.za – now in its 11th year – is further closing the loop between buyers and retailers.

Consumers can upload their cars’ details to Match! via any Cars.co.za platform (desktop or mobile site, the latter also via the app). What’s more, by filling in the particulars of the vehicles they hope to sell, in addition to stipulating details of the cars they’d like to buy next, consumers can be matched with the dealers that could best facilitate the replacement of their vehicles.

Once a seller has successfully uploaded details and images of their vehicle on Match! it will appear on participating dealers’ systems for a period of 48 hours

Since Match! went live nationwide, more than 10 000 vehicles have been uploaded by consumers and literally hundreds of dealers have activated the service. Sellers on Match! can receive multiple offers on their car from trusted dealers in 48 hours, whereafter they are provided with a choice with regards to which offers (and dealers) they’d wish to connect. 

Importantly, only once a seller and dealer have established direct contact are the former’s personal details revealed to the latter, thereby protecting the seller from any spam-related communications. If both parties reach an agreement on the sale price of the vehicle and subsequently strike a deal, Cars.co.za charges the buying dealer a nominal commission fee.

Sellers can contact dealers directly from the dashboard once a connection is established and are under no obligation to sell their vehicles

How it works

Once a seller has successfully uploaded details and images of their vehicle on Match! it will appear on participating dealers’ systems for a period of 48 hours, during which retailers can make offers on the vehicle. Those dealers will receive stock alerts that notify them when a prospective model that meets their stock requirements has been loaded on the system. 

Should the seller receive one or more offer(s), an email and SMS will be sent to them with a link to a dashboard that contains a consolidated, ordered list of offers. The seller then has 48 hours to “connect” with an offer once the car is no longer active on the system (or offers expire). Upon connection, the seller’s details are shared with the dealer and vice versa.

Sellers can contact dealers directly from the dashboard once a connection is established and are under no obligation to sell their vehicles. Sellers can reject offers and provide feedback as to why they rejected them, which provides dealers with feedback on their offers.

Furthermore, a seller has an opportunity to re-activate their vehicle if they wish should they have not received offers or did not like the offers they received (and those offers expired).