Buying a Quality Used Car and Safety on the Road
In a challenging economic climate with tight budgets, few of us are privileged with the financial means to buy a new vehicle.
It does not matter whether we call it is used car, a second-hand car or a pre-owned car - but there has been a continually growing market in South Africa for these vehicles.
In this section, we wish to guide the buyers of used cars to finding quality cars which are both affordable and safe on the road!
Benefits of Buying a Quality Used Car
- Affordability/ Cheaper Price: Buying used cars will be significantly more affordable than buying a new car. You won’t pay nearly as much for a used car than a new car. The exception is a high-end or vintage car which may most likely keep its resale value.
- Reduced Rate of Depreciation: Used cars will already have gone through considerable depreciation. The car may not lose value as quickly as when the car was new. You’re far less likely to worry about dings and chips than you would with a brand spanking new model. Even though the used car will still depreciate after buying it, it won’t be near as much as when you buy a new car.
- Cheaper Car Insurance for Used Cars: A car’s age and value influence how much your insurance is, so a slightly older, less valuable used car will be cheaper to insure. One of the major benefits of buying a used car is that the insurance will be lower than a new car due to it being an older car and model. Because of the depreciation of the car’s value, your insurance will cost a lot less.
- Ability to Buy a Warranty: You won’t miss out on a warranty just for going the second-hand route, because you can buy a certified pre-owned car or buy a warranty. Certified used vehicles may also come with the benefit of an extended warranty, special financing and many other benefits, compared to a new car which is only assured by the dealership for it being brand new.
- Wide variety of Choice: There are set options when you go new, but second-hand cars are available in their 1,000s online.
Risks of Buying a Used Car
The buyers of used cars do however need to be alert and cautious as a used car could come with underlying problems.
- Existing problems with the Vehicle: By law, when the sellers sell the car to the dealership, they have to disclose to the dealership if there are any problems or not. Unfortunately, this is not always guaranteed.
- Mechanical issues: Dealerships will try and remedy the vehicle to run smoothly, but after some time, these problems could re-occur.
- Compromises are Required: You will most likely have to compromise with a used car in terms of specifications such as colour, mileage etc. and might have to look for a second option as well when the dealership does not have exactly what you want.
How can I Make the correct Decisions when Buying a Used Car?
Factors to Consider when Buying a Used Car
There is much more to consider than the aesthetic appeal of the vehicle before you buy a used car. The buyers of used vehicles should take special care not to pay an inflated price and to insure for the correct values. Good advice is to check the Trans-Union Auto Dealers’ Guide, to establish a fair price of a used vehicle before purchasing.
Don’t make your purchase decision based on a cursory review only. Research the vehicle thoroughly; be aware of the mileage, accident history and roadworthiness of the vehicle.
Buying a second-hand car takes persistence and lots of homework. Do your research before buying a used car. Make sure that the vehicle does not have underlying issues. Fuel consumption and the cost of the car’s parts is another important research point and you can use Kinsey reports to assess the cost of running, servicing and repairing various car makes and models in South Africa.
Check what the market value is on the vehicle to ensure that the purchase price isn’t too high or too low when considering the depreciation. The depreciation of a car can drop by 65% of its value within five years of ownership, allowing the purchase of the used vehicle to be at a more affordable rate.
Always look for the best resale price, make sure that the price isn’t too high or too low and that it corresponds with the mileage and year model of the car.
Shop around and compare various models’ features and prices. When researching, pay attention to kilometres on the odometer, investigate things like the car’s service manuals and ask about its accident history and if it comes with the spare key.
Where do I buy a Quality Used Car? Who is the Seller of the Pre-Owned Car?
Some buyers are fortunate to find a family member, close friend or colleague whom they know well and who wish to sell a car. It is always the best possible scenario if you know the previous owner and his character, lifestyle and especially his or her driving behaviour!
Others may be tempted to go for a “bargain” posted online by someone they are not familiar with. You may find cheaper used vehicles through private sales, which is especially important if you’re on a tight budget but still want some modern motoring features. Caution is however required!
It is always advantageous to buy a car from a respected, established dealership. Dealership buys can bring some peace of mind that there’s a company standing behind the quality of the vehicle you’re purchasing. Do your homework first to find a trusted dealership.
Used car dealerships will usually do a thorough inspection on a used vehicle and will also confirm that they are certified roadworthy. When used cars are inspected, dealerships often fix and repair the vehicle where it’s needed and make sure that the car is spotless inside and out. This inspection may reduce your cost when buying the vehicle.
These dealers take greater care of second-hand cars, which are usually acceptably priced, and appear virtually new. You would perhaps have a better come-back approach with excellent dealers, compared to a recent seller, whom you may no longer be able to trace after the car purchase.
If something should go wrong with your car, you’ll have a much greater probability of getting it repaired by a commercial dealer compared to a private dealer
The Retail Motor Industry of South Africa (RMI) can assist with information on local car dealerships that are members of the National Automobile Dealers Association (NADA). It’s also recommended that you investigate social media platforms to see what other motorists have to say about the dealer you’re considering buying from.
Whether you’re buying from a private person or a dealership, you have a right to check whether a vehicle is stolen or has been stolen and recovered in the past. A vehicle verification will help you to see the status of the car you’re considering buying. All you need is the car’s VIN (Vehicle Identification Number).
The Second-hand Car and Service Plans, Warranties and Maintenance
One of the reasons people buy new cars is the peace of mind that they come with a service plan and a warranty. There are however also second-hand cars out there that do come with a service plan - you just need to look for one. And when you do find a car, enquire if you can extend the service plan.
Some used cars might still have the balance of the warranty that was carried forward from the previous owner, especially if the car is not older than five years. This can save you on costs if something goes wrong with the vehicle.
If the car’s warranty has expired, the dealership could offer you an extended warranty either from the original manufacturer or an outside party. This is beneficial as your car will always be worked on by highly trained, professional technicians. You can either pay this by monthly instalments or add the cost of the extension to the car’s purchase price.
With sound financial planning, you could also decide to deposit a monthly instalment into your savings account, which cannot be easily accessed. In this way, you’ll be financially prepared for the next expensive service.
Financing Options When Buying a Used Car and Pre-Owned Car
Start by creating a personal motoring budget and setting a price cap. Before you test drive any cars, first figure out how much you can realistically spend. Use an online calculator to help work out what you can afford and what your monthly instalments will be if you decide to get vehicle finance
You can use TransUnion’s Car-Value-Report system to gain insight into the trade-in and retail value of a used vehicle. This is also known as the ‘book value’. The ‘book’ refers to TransUnion’s monthly Auto Guide, which lists vehicles from A to Z in terms of their original retail price compared to how the value of the car has depreciated.
This tool can help ensure you aren’t paying above ‘book-value’ for a car, but it’s important to note that sought-after used cars might command ‘above-book’ prices. Having the TransUnion report might help you negotiate a better price on the car you’d like to buy.
Once you’ve done your research on your dream car and you’ve decided that you’re going to buy it, you can start your negotiations with the private seller or dealership. Be patient in this process as the seller might reduce the price if you can give them a good reason to, based on your research. The price tag stuck on the car’s window at the dealership doesn’t have to be the amount you pay before taking ownership of the used vehicle.
You should negotiate a final price that includes all the on-the-road costs, such as costs for a roadworthy test, and registration fees. Has the car been checked by a reputable organisation such as the Automobile Association?
It’s important to remember that walking away is your right as a buyer, and you should be prepared to leave if you feel pressured or uncertain about a vehicle.
After deciding on the price of the car with the seller, sign an offer to purchase. You may also have to pay a deposit for surety reasons (10% of the asking price is usually more than enough, but this also depends on whether you’re buying cash or financing a portion of the vehicle’s cost). Remember that you must always get a receipt for any deposit paid.
Car Insurance and the Used Car
Before you drive that dream car out of the dealership’s front doors, make sure you first protect it by buying car insurance. A car is often the second most expensive purchase a person makes, so correctly valuing your vehicle is especially important in the event of a write-off, hijacking and theft claims
Crashes happen, thieves take chances, and potholes are on roads all around us! You don’t want to spend all this time doing your homework to find the car of your dreams only to have it stolen from right outside your local grocery store with no means of being able to replace it.
Most insurers use retail replacement value when determining a settlement value for vehicles. Some insurers will use the average between trade and retail value, as the basis of settlement. Check your policy to see what your basis of settlement is so you can take that into account when setting your vehicle sum insured
Generally, the insurance industry will use the TransUnion’s Car-Value-Report as a guide to decide a settlement value on write off and to adjust vehicle values on the policy's anniversary date.
It’s important to shop around and get quotes from top insurers. Keep in mind that there are different levels of car insurance, from the third party only to comprehensive options. Ensure that if you choose a comprehensive option, that your premiums will decrease every single month in line with the depreciating value of your car.
When you contact your insurer to insure the vehicle be sure that you give accurate details of the make model and year of first registration and the mileage. Also, be sure to give details of the after-market accessories and their values that you wish to insure.
According to Alexander Forbes policies, a vehicle is written off if the cost of repair exceeds 70% of the retail value of the vehicle or 70% of the sum insured if that is less. In the case of hijacking or vehicle theft, the vehicle owner will be paid out as if the vehicle was written off.
Roadworthiness and Keeping the Used Car Safe on the Road
On the Arrive Alive website, we strive to create awareness of road safety and save lives on the road.
Buying a used car means you’re making a wager on the vehicle’s mechanical history. But you can limit unexpected repair and maintenance expenses if you determine the actual condition of the car through an independent check-up.
Once you have found the perfect used car for you, you need to have the selected car checked by an independent, reputable garage. You want a safe and reliable car that won’t give you hassles in the long run.
This is a great opportunity to make use of the Automobile Association, which conducts thorough examinations of cars at 11 technical centres located all over South Africa. When buying a used car through the Gumtree website, for example, Buy Safe Sell Safe can assist you with a DEKRA-test and inspection as well as ownership ‘certified by TransUnion’. You can also ask a private seller to provide you with a DEKRA test certificate, which can be conducted for a nominal fee at vehicle roadworthy testing centres countrywide.
The AA highly recommends investigating the safety features available in a vehicle and, if possible, checking the vehicle’s safety rating with them. It’s also important to determine what sort of fuel consumption you will be happy with. Also, bear in mind future maintenance and service costs (including replacement costs of items such as tyres and brake pads), and don’t forget to factor in the cost of insuring your car.
Checklists to follow when Buying a Used Car
Checklist 1: Important documents and details
The registration documentation: Check that the seller is the registered owner and that the number plate, VIN, engine number, and colour match the documentation.
The VIN: Make sure the VIN plate hasn’t been tampered with, that the number on glass/lights matches the VIN plate, and there are no scratches to remove etched-in marks.
Checklist 2: Mileage details
Consistency: Check that the mileage and age on service records and other documents are consistent.
Checklist 3: Evidence of an accident
General appearance: Inconsistent gaps between panels, mismatched colours, or an uneven paint finish across the car could indicate extensive repairs.
A closer look: Check for traces of paint spray on handles, window seals, or plastic mouldings, and the appearance of welding under the bonnet or in the boot.
Checklist 4: Safety factors
The tyres: Check the tread and wear of the tyres to see if you will have to replace the tyres soon after buying the car if there’s a spare wheel or tyre inflator/sealant kit and if these are in good condition.
Inside: Make sure the seatbelts function properly and aren’t in poor condition (fraying etc.) if the airbags are fitted, if the warning lights operate as in the manual, and if all lights and windscreen wipers/washers work correctly.
Other features: Look to see that the jack and other tools are present and if the locks work (including the remote control and central locking).
Checklist 5: The test drive
Keys: Sounds obvious, but check that you have the right keys.
Brakes: See if the brakes make a funny noise, take too much effort to work, pull the car to 1 side when used, and if the handbrake is effective.
ABS: If the car has ABS, look to see if the warning light goes out after the engine has started.
Lights: See if each of the lights in and outside the car operate normally.
Minor controls: Ensure these work properly, such as heating, ventilation, air-conditioning, sound system, navigation, etc.
Steering: As you drive, check if you can feel any steering vibration or pull to 1 side as you go.
Windows: Check that all the windows, including the sunroof, open and close normally.
Checklist 6: The engine
Cold: Turn the engine on from cold and check for abnormal noises, if the oil warning light goes on, and for any signs of excessive visible exhaust emissions.
Clutch: A noise when you press the pedal or a high biting point could indicate that repairs will be needed.
Oil: Check that there aren’t signs of sludge on the underside of the oil filler cap (indicating poor servicing) and that the oil level is right.
Cambelt: Check if the cam belt has been replaced according to the service schedule.