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Use this 5-point checklist when buying a used car
Be sure that you get good value for money and budget for ongoing costs.
Buying a used car might be your best option if you have a tight budget, but you’ll need to consider a few more factors than you do when buying a new vehicle off the showroom floor.
Before you buy your next car, consider these 5 tips:
1. Set a budget before you shop around
It is important to be realistic about what you can afford, so make provision in your budget for filling up the tank and the service, maintenance and insurance costs. Use our free online budget calculator to work out your budget and check your affordability. Once you have completed your budget, use the instalment calculator to calculate your monthly instalment based on the price, the deposit you can afford to put down and your preferred repayment term.
2. Decide between a dealership and a private sale
Car dealerships often bring reassurance when buying a second-hand vehicle – if you use one of the dealers listed on Avo Auto, you can be sure that their used cars are properly inspected and valued. On the other hand, some sellers prefer not to work through a dealership, so if you ignore private sellers and confine your search to dealerships, you might miss out on the perfect used car that meets all your requirements.
Make sure you get professional advice to ensure that the private sale protects both you and the seller. If you apply for a car loan at MFC, a division of Nedbank, for example, we will ensure that the Dekra check and all other certifications are done properly, and supervise the transfer of ownership when the seller is paid. MFC vehicle finance is also an option if you’re buying a used car from a dealership, of course.
3. Make sure the used car is worth the asking price
The retail value of a car, commonly referred to as the ‘book value’, refers to the current value after depreciation is subtracted from the original price. There are several factors apart from book value that could also affect the price of preowned cars, such as demand in the market.
Compare the asking price to the prices that second-hand cars of the same model and age are currently fetching. Also consider what the trade-in value will be if you want to sell it in a few years.
Buying a used car is a great step towards independence, but you don’t want to end up losing money
Of course, if it’s a collector’s item or a vintage car, it will generally sell for higher than its original retail price. If you’re looking to save money buying a used car, ignore the collector’s vehicles and focus on common models that are not too old instead. To qualify for MFC finance, whether you buy from a dealership or a private seller, a used car must be less than 10 years old, it can’t be a recovered stolen vehicle and the loan must be for at least R50,000.
4. Add the cost of maintaining a car to your budget
Many buyers do not factor in the cost of maintaining a car, which ends up causing them financial problems later. It is vital to include vehicle maintenance and the other costs of car ownership when creating your budget. Here are guidelines on what you need to check:
- Always note the number of kilometres the car has already driven – the higher the mileage, the more likely it is for services to become more costly, because expensive parts like cambelts and turbochargers must be replaced after years of wear and tear.
- Make sure the seller has a service book with a record of all the car services, any accidents and repairs in its history, and a warranty on any repairs done.
- Include costs like vehicle licensing fees every year, and the cost of parking and tolls if they will apply to your regular driving schedule.
- Research the typical maintenance and service cost associated with the car and consider buying an extended service and warranty plan to cover any repairs in the future.
- Compare the fuel consumption with the amount of driving you do every month, to get an estimate of your monthly fuel costs.
- Insist that the seller provides a Dekra certificate – this is proof that the vehicle has been inspected by experts and is in good running order, so it’s not going to break down the moment you take ownership and require expensive repairs. The Dekra certificate also makes you aware of any issues, so you can decide if you want to buy the car knowing you’ll need to fix those.
5. Avoid online scams and fraudsters
Online shopping is so popular because it’s so convenient. If you’re selling a car, it’s the best way to reach the largest audience in the shortest time. But it has also given rise to online scams and fraud.
Do the necessary research before committing to a purchase
In a buyer scam, for instance, false proof of payment can be generated and sent to a seller, so the fraudster gets away with the car without paying for it. Or a fraudulent seller might trick a buyer who has not done the necessary checks into buying a stolen or unroadworthy vehicle. Choosing to buy a preowned car privately requires research – if not done correctly, you could suffer a financial loss.
That’s why using reputable service providers like MFC can give you peace of mind by facilitating safe and secure private vehicle sales. MFC assist buyers of preowned cars by:
- doing the administration, verification, and re-registration of the vehicle,
- ensuring the technical inspection and roadworthy is done by the seller,
- ensuring payment is made to the seller or other finance house, and
- ensuring that the car has an existing warranty, or helping you to buy one.
Buying a used car is a great step towards independence, but you don’t want to end up losing money by not making an informed decision. Do the necessary research before committing to a purchase, and get help when you need it.
