Buy a new or a used car?
BRIAN BASSETT investigates the dilemma of the SA motorist in a depressed economy
A RELIABLE motor vehicle is a necessity in a country like South Africa where public transport is often unreliable and expensive.
The recent massive decline in the purchasing power of the rand is driving up the price of new vehicles.
Depending on their country of origin, costs have risen between 2,5 and 17%; and there is little importers can do about these rises.
Car purchases have further been complicated financially by interest rate rises and I read this week in a reliable financial magazine that the country can expect a further two or three interest rate hikes this year. In the case of motorists, who have financed motor vehicles, it is possible that their repayments will rise with the interest rate.
All motorists should check on this with their banks.
OH FOR ALL THAT SHINE!
We all love a new car. It has not been driven by anyone else, it comes with a guarantee and dealership staff attend to your every need, while telling you what a good choice you have made.
As you drive off with your basket filled with champagne and sweets, the salesman who sold you the car gives a sigh of relief.
He can now pay his children’s school fees. You, unfortunately, have just lost a quite considera- ble amount of money in depreciation and the longer you keep the car the less it will be worth.
If you retain the car for a long period of time, say 10 years or more, it will have paid for itself and so you will be able to live with the small trade- in price you will get for it.
Most of us, however, get bored with the cars we drive, we lust after the turbocharged, newer model with leather seats and built- in GPS and we end up at the dealers, begging for a better trade in and hoping for a discount or, as they say these days, trade in assistance; and the cycle starts again.
MAYBE SCUFFED IS COMFY?
The only option to buying new is buying used and in bad economic time’s car buyers will inevitably turn to the used car market, as new vehicles become less affordable.
Raymond Loewy, arguably the greatest industrial designer of the 20th century, once said that buying a used car was like buying a secondhand snake.
This has not been my experience, but I have always bought from reliable dealers who have been around a long while and have a reputation for integrity and fair dealing.
I looked around in Petermaritzburg and found Metro Car Sales, who are celebrating their 40th year in business in the city.
They came highly recommended by a number of friends, who have done repeat business with Metro over a number of years.
I spent about an hour- and- ahalf with Elvis Naidoo, their sales manager and learned how customer care has resulted in a business that derives 85% of its new business from referrals and repeat business.
Metro buy only selected vehicles of excellent quality.
Forty percent of the stock come from the man in the street and the rest from auctions and sites like OLX and Gumtree.
Vehicles are thoroughly checked and referred to the Metro workshop if necessary.
Vehicles often have extras like air conditioners, canopies, mag wheels and leather seats, which are all part of the deal.
Used car buyers do not pay VAT and a used car lot has a wide variety of vehicles allowing a more choice, but Elvis says people buy with their hearts and not their heads.
It is even difficult to get customers to test drive the car they want to buy.
The Metro sales team is focused as much on service as on sales and they try to match the customer with the car.
There are many cash buyers, but where finance is required, customers can select any bank, as the dealership is recognised by all of them.
Customers who purchase ve- hicles out of warranty are encouraged to buy a two- year warranty extension, which adds about R7 000 and peace of mind to the deal
Once the customer leaves with his new, used car Metro retain contact and build relationships by sending its buyers a thank you card once a year and encouraging them to visit the dealership to discuss niggles or problems.
I was very impressed by the whole customer- orientated feel of the business. But what would I get for my money?
So I was given a 2014 Volkswagen Polo auto in glorious red to drive for the weekend.
The car had had its 17 500 km mileage thoroughly checked and with my dealer number plate displayed in the window I drove away.
Once home I checked the bodywork thoroughly and there was nothing amiss.
The exterior and interior were like new and the car performed well both in town and on the N3.
This was a vehicle I would be proud to own and at R165 000, it represented a significant saving on the cost of a similar new vehicle.
Buying used can be a good option at any time, but you need to shop around, see what is available.
Be honest with yourself as to affordability and allow for rising interest rates and insurance costs. Buy the additional warranty and test drive the car before you buy and discuss any problems with your salesperson. You take the initiative. Do not get pushed into a deal. Remember, you are also protected by the Consumer Protection Act and you should get to know it as it applies to all your purchases.
Metro Cars’ Elvis Naidoo ( left) puts a pre- loved Polo through a 50- point checklist with Brian Bassett who advises buying used cars from a reputable dealer is a sound financial decision, but do get the additional warranty and discuss any problems with the sales staff.
Buyers of used cars are best advised to ensure the seller shows the vechiel using a 50- point check list.