Things you should know before buying a used car in South Africa

 ·30 Jul 2023

In the face of rising living costs, fluctuations in interest rates, and high fuel costs, many South Africans are looking at purchasing a cost-effective pre-owned vehicle instead of a brand-new model.

Considering this, WesBank offers helpful guidance for those looking to purchase a used vehicle, providing tips on how to avoid common mistakes and navigate the pre-owned market successfully.

According to the bank, it is important to have a good understanding of a used car’s history before making a purchase. Potential buyers should gather as much information as possible about the vehicle they are interested in, focusing on important factors such as:

  • The number of previous owners;
  • Total mileage;
  • Vehicle age;
  • Possible accident history; and
  • Service history.

The bank added while it may not always be possible to obtain every detail, building a comprehensive profile helps minimise the risk of buying a problematic vehicle.

Assessing a pre-owned car’s market value is equally important, and various factors such as age, mileage, service and ownership history can impact its price.

For example, a three-year-old car with 60,000 kilometres on the clock, a full-service history, and a single owner will generally be worth more than a similar car with no service history.

To ensure a transparent and secure transaction, WesBank advises potential buyers to conduct business with reputable and approved dealers, preferably those with National Automobile Dealers’ Association (NADA) and bank approval.

“Such dealers are better positioned to provide reliable information about a vehicle’s history as well as aftersales support,” said WesBank.

Buyers should also remain cautious if they come across a vehicle advertised at a price significantly below its market value.

“Such instances might indicate issues like high mileage relative to the year model, previous accident damage, or a history of serious mechanical problems,” Wesbank noted.

Another red flag for buyers is encountering a vehicle labelled as “code 3,” an insurance term denoting a vehicle that is “permanently unfit for use” or one that has been stolen and recovered. WesBank and other financial institutions will not finance these vehicles, regardless of the reason for their classification.

To make an informed decision, buyers are encouraged to have a knowledgeable person accompany them to assess the vehicle’s condition and take it for a thorough test drive. Seeking the expertise of a trusted mechanic to examine the car before finalising the purchase is also a wise move.

Checking whether the pre-owned car is still under warranty or within its maintenance or service plan period is essential.

“If not, it is advisable to consider purchasing an extended warranty, service, or maintenance plan. These can be obtained through the dealership’s Finance and Insurance (F&I) liaison, who will facilitate the process,” the bank said.

WesBank noted that prospective buyers should also consider all the associated ownership costs.

“Affordability is a significant factor to consider, encompassing costs such as insurance, fuel, and wear-and-tear maintenance items. Particularly for older vehicles, fuel consumption and maintenance costs are essential considerations. Buyers should also be aware of the replacement costs for consumables like tyres, which can impact the overall maintenance budget,” it said.

WesBank reminds all potential buyers that reputable dealerships have F&I specialists who can tailor finance agreements to meet individual needs. Engaging with the dealership’s F&I consultant during the finance application process ensures that customers fully understand all documentation before signing.

“By following these guidelines and collaborating with trusted dealers, buyers can make informed decisions and confidently invest in their next pre-owned vehicle,” said WesBank.

Read: How much it costs to finance a R300,000 car in South Africa at current rates

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