Cash buy best option for first-time buyers

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“I would suggest a cash buy – save enough money, buy outright. In certain instances if you’ve got a large deposit, but you’ve shopped around, you could actually get a car for just the deposit. You don’t have to worry about the monthly instalments, the insurance that goes with it,” Moodley, an independent motoring advisor, told CNBC Africa on Wednesday. 

Car financing is not as easy as it seems, whether you are buying your first one or paying off one that you’ve had for a long time.

First time car-buyers have a number of factors to consider. These include establishing a realistic budget, establishing transportation needs, identifying and prioritising your wants, taking the car for a test drive and determining a proper purchase price.

Moodley believes that you have to take the emotion out of buying your first car, and that there are a number of other factors that require careful consideration as well.

“The obvious one would be your budget, what fits into that budget, what kind of deposit you have, what kind of financial package you’re looking at,” he explained.

“That monthly instalment isn’t the cost of motoring, you’ve got to look at incidentals – your fuel for the month, warranties don’t cover tyres, and it depends on what kind of service or maintenance plan you’ve purchased with the vehicle.”

Consideration should also be given to whether or not the buyer would prefer a brand new car, a second hand model or a demo model.

“The second hand car market has picked up drastically. So you’re going to get a second hand car for maybe 10,000 rand less than a brand new one – why would you when you can have a brand new one for 10,000 rand more. If you’re buying your first car, but you want a brand new car, do your homework,” Moodley indicated.

He added that most first time buyers are students, and that it would be best for them to stick to well-known brands.

“You don’t want to buy a car that you don’t know too much about – you want a brand name, a reliable, well-known brand because that’s your first buy. You may spend more money but stick with a brand name because when it comes to selling it or getting rid of it, they buy quicker than if it’s a lesser known brand.”