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Get the best advice

2005-03-30 16:12

New or used?

There's no straight answer to whether one should buy new or used. If budget is not an issue, then a new car is probably the way to go because you'll have the benefit of a maintenance or service plan, with no hidden histories tucked away under clever repair jobs.

If you have a set budget, then it is worth looking at used and nearly-new cars, although a bit more work is required to ensure that you get the best deal for the right price.

If you are considering a used car, you should insist on an Automobile Association (AA) check before you make your final decision.

AA experts are trained to find concealed damage and advise on potential problem areas. Make sure that the car comes with a full service history as this will tell you whether or not it has been looked after properly.

A nearly-new car on the other hand, probably delivers the best value for money.

These cars are generally less than a year old and tend to have low mileage. Again, insist on an AA inspection and check the car's service history.

Don't be misled into thinking that if a car is nearly new it can't have been involved in an accident - an accident can happen the moment it's driven off the dealer's floor!

Negotiate the best deal

Motor dealers are always negotiable but you need to know when you can and

can?t push them. Don?t expect to negotiate successfully on a new model that is set to hit the streets, as the demand for the vehicle will be high and the dealer probably has buyers lining up who are willing to pay full price.

If, however, you're looking at an older model, then by all means negotiate for a price reduction. Dealers are usually open to some negotiation in this case, as it helps them move older stock quickly.

They also believe it will soften the blow for the customer when a new model comes out shortly after they've bought their car. If you?re paying cash upfront, you should definitely get a reduction in price. Dealers like to know that they have money in the bank immediately and don't need to wait for bank financing to come through.

Don't think about trying to get a free CD player or leather seats thrown in for nothing, but do try your hand at negotiating for a set of floor mats.

Shop for the best trade-in

"Shop around!" says de Blanche.

"You will probably get a better deal if you trade like-for-like, which places you in a position to evaluate the whole package option of buying new and trading in old. While you will probably get a better price if you sell privately, there are more risks associated with private sales as opposed to selling to a dealer. "

Private sales - the minuses

A private sale exposes one to various risks but two are particularly noteworthy.

  • When you buy from a private individual, you have no recourse. If there something goes wrong with the car after you have paid for it, the problem is yours.
  • As a result of the above, banks tend to avoid financing cars that have been bought privately. If you want to try to obtain financing, an AA report is obligatory, in order for the bank to assess the risk value.

    De Blanche says Nedbank has an extensive database of recommended selling prices for all vehicles. Contact them for more information.

    Any car under a finance agreement belongs to the bank until the full outstanding balance is paid in full.

    By taking out a finance agreement with a financial institution you are legally obliged to meet certain criteria.

    When you take out finance to purchase a car, the financial institution is the titleholder and you are the owner. Essentially, until you make your final payment to the financial institution, you do not have full ownership of your vehicle. This prevents you from selling the car without permission from the titleholder.

    As the owner, you are obliged to keep the car in good running order and it must be insured at all times.

    When you have paid the car off, you must insist on getting a NATIS certificate, stating that you are both the titleholder and the owner, from your financial institution, so that you are able to sell the car at a later stage.

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