3 Reasons to Buy a Used Car Now

Now that summer is on the way South Africans are all itching to hit the open road, go on holiday, take day trips, or just catch up with friends and family. Perhaps you’ve been itching to buy a new car for a while but just haven’t been sure.

The state of brand-new cars

If you plan to buy a brand-new car, it might be a tad more difficult to get exactly what you want right now. The South African car market has seen quite a shake-up during the Covid-19 crisis with vehicle manufacturers being forced to close for the first few months of the lockdown.

In short, this means you might not be able to get the car you want because production has been impacted resulting in low stock of certain car brands. In June, the National Association of Automobile Manufacturers of South Africa (NAAMSA) said it expected a drop of 25% in the production, sale, and export of new vehicles in and from South Africa. Its CEO Mike Mabasa told Engineering Newsthat “Covid-19 will have a major impact on the rest of the year”. This doesn’t mean that there are no new cars available, but you may have to look a bit harder for what you want or be willing to compromise. 

Great deals on a used cars

If you can’t find a new version of the make and model you want, why not search the pre-owned car market? Asif Hoosen, the head of sales at Audi South Africa confirmed in an interview with iol.co.za that there is value in buying a premium used car now. According to him, pre-owned cars offer “the best bang for your buck in terms of what you’re going to get for the price compared to a new car”.

TheTransUnion SA Vehicle Pricing Index (VPI) showed that buyers have been favouring used over new cars since lockdown restrictions were relaxed. This can be attributed to buyers realising they can get a good deal, or may be a result of the widespread loss of income caused by the lockdown. Either way, the VPI found that 33% of vehicles sold were under two years old, which means you may be able to find a used car that’s as good as new!

TransUnion’s head of auto information solutions, Kriben Reddy, toldTimesLive that the cost of car ownership is declining and that buyers were increasingly choosing to buy pre-loved or lower-end new vehicles. “For many consumers this is more than adequate and it is not necessary to look any higher up. Buying a lower-end vehicle means less monthly instalments, less in maintenance and running costs and most likely more affordable insurance premiums,” he said.

Low interest rates

In response to the Covid-19 pandemic and the associated economic hardships, the South African Reserve Bank cut the repo rate twice since March. This resulted in a significant decrease in the interest rates paid by customers. This gives you one of two advantages:

1. You can buy a slightly more expensive car than you originally planned, at the same instalment rate. 

2. Or you can buy the same car you were hoping to buy, but at a lower instalment than you would have paid before the pandemic. 

The National Automobile Dealers’ Association (NADA) said it hoped the Reserve Bank would keep interest rates low for at least the next two years.

Tips for new car buyers

If you decide to scratch the itch and go for it, there are a few things to keep in mind:

1. Budget properly: Don’t forget car insurance is mandatory for financed vehicles.

2. Be flexible: The more flexible you are the more likely you’ll find a good deal. 

3. Cast a wide net: Shop around but make sure that you look at reputable dealers only.

4. Test drive: Get a feel of whether it is a good fit for you and be 100% satisfied.

5. Get the best deal: Ask questions and don’t be afraid to negotiate a better deal.

6. Sleep on it: Take your time. Don’t be too hasty to sign the deal.

7. Be patient: If you do prefer a brand new car, wait until the production of cars catch up 

Some dealerships require that you make an appointment beforehand, so check their website or give them a call before heading out. In many cases, a large part of the buying process can be done online, including applications for financing. 

So is it a good time to buy a used car? That depends on you and your situation. But if you have the means and need a car for practical and leisure use, then the surplus of relatively new pre-owned cars and slashed interest rates could mean opportunities for a good deal!

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