Often, vehicle buyers are not informed about all the costs involved in owning a vehicle, basing their decisions only on the financial instalments, says head of Nedbank’s Vehicle and Asset Finance division Stephen de Blanche.
Often, vehicle buyers are not informed about all the costs involved in owning a vehicle, basing their decisions only on the financial instalments, says head of Nedbank’s Vehicle and Asset Finance division Stephen de Blanche.
He said buyers often did not weigh up all the costs associated with purchasing and owning a car.
“When about to buy a vehicle, look thoroughly at the bigger picture and consider all the costs that come into the total ownership equation. These accumulated expenses include monthly insurance payments, vehicle tracking subscription, service and maintenance costs when no motor plan is provided, replacement of tyres and rising petrol costs.”
Often, after two or three years, buyers found they owed more on a vehicle than the initial cost, particularly when buyers on company car allowance schemes chose not to put down a minimum cash deposit of 10 per cent. De Blanche said this problem was aggravated with cars whose value depreciated rapidly, leaving the trade-in value lower than that of the more popular makes.
“If budget is not an issue then a new car is the best way to go,” de Blanche said, “as this would include the benefit of maintenance and service plans, plus no hidden history tucked behind clever repair jobs.
“Buyers with limited budgets should rather look at used cars – the newer the better.”
The best value for money, according to de Blanche, is a nearly new vehicle, which is generally less than a year old with low mileage. He cautioned all buyers interested in used vehicles to insist on an Automobile Association check, or alternatively take it to a good motor mechanic before making a final decision, even in the case of a nearly new purchase.
“Do not be fooled into believing that if a car is nearly new, it has not been involved in an accident, which could happen right as it is driven off the dealer’s floor,” de Blanche said. He insisted that these cars also be subjected to mechanical and body examinations plus a service history check.
While it is possible to negotiate with dealers, this is not as likely on new models as demand is generally high and dealers probably have buyers lined up.
“Buyers who pay cash up front should definitely negotiate on a reduction on price,” he added.
Stephen de Blanche will be a speaker at the upcoming CAR Conference (held in association with Nedbank Vehicle Finance), which takes place during the Auto Africa Expo at the Expo Centre (NASREC) in Johannesburg on October 27. For more about the conference’s programme, speakers and booking details, click here.
