Having your own car comes with plenty of benefits, the biggest one probably being the convenience of being able to travel where ever you want whenever you want to.
Cars also come in handy for most job positions so having one really is an advantage. The downside is that cars are not cheap and once you own one it becomes your responsibility, which might come as a challenge financially.
There are many factors to consider before buying a car especially since the Covid-19 pandemic which left many working from home. If you are not travelling to work than do you actually need a car?
But on the other hand, others have been called back into the office and might be too scared to use public transport, those people might feel the need to buy their own cars.
Shafeeka Anthony, the Marketing Manager at JustMoney said more people might find themselves tempted to buy a car now due to the low interest rate.
“With interest rates currently at a record low, many people who have been considering investing in a vehicle will be tempted to make that purchase,” she said.
Anthony added, “As with all major investments, it is important to do your homework first. What could look like a bargain could turn out to be a major drain on your household budget. Deal through reputable providers, get comparative quotes and be honest with yourself about your financial position and needs.”
Whether its a brand new car or a pre-owned one, there is plenty to consider before committing to such a purchase.
Personal finance website JustMoney reached out to experts that provided a breakdown of the costs that come with car ownership.
Here is all you need to know;
Costs to consider according to vice president of auto information solutions at TransUnion Africa, Kriben Reddy.
Beyond a deposit and monthly premiums for non-cash purchases, the first major cost of owning a car is fuel. Whether it is diesel or petrol, this is an ongoing cost that will fluctuate in line with inflation.
If your car is financed, the seller, on behalf of the financier, won’t release it to you unless it is insured. Insurance is imperative to protect you, the owner, and your creditor.
“The cost of insurance can also vary depending on whether the driver is female or male, your credit score, place of residence, occupation, and claims history,” said Anthony.
Find out more about which car insurance is the cheapest for young drivers here.
If you are buying a second-hand car that is almost out of a motor plan, or a brand-new car where you opted against a motor plan, to increase your chances of affording the car, then this is a cost you will have to consider.
These range from renewing your license disc annually, to replacing tyres or any other parts that are not covered by either your motor plan or insurance.
What about second-hand cars?
According to Dov Stern, the director at MotoMatch, used cars are an excellent option, especially for customers looking to get great value for their money. “These vehicles have depreciated, so the prices offered are more attractive than the equivalent new car,” he said.
If you do decide to go this route, be sure to check the following:
· Get the car’s roadworthy certificate, so you can see any issues that need to be addressed.
· Check that the car has been serviced at each of the required service intervals, and that the dealer/service centre that performed the service has stamped the service book.
· The average yearly mileage is 25,000 km, so be aware if you are buying a higher mileage vehicle.
· Check if the car is still under warranty or has a service/maintenance/motor plan and for how long this plan is still applicable. Ask if it’s possible to extend the warranty/maintenance plan as this could save you a lot of money in the long term.
· Make sure the car hasn’t been in any major accidents and/or it hasn’t been rebuilt. You can check for a rebuild on the NaTIS certificate, under “vehicle status”. This should say “used”. Request an accident damage report and test drive the vehicle.
Any other options?
If owning a car is a bit too pricey for you than it might be worth looking into other cheaper alternatives like cycling or public transport.
Another alternative could be e-hailing services such as Uber and Bolt, cabs or car rentals but these can easily become expensive depending on how often you use them.
“E-hailing is cheaper if you are going into the office once a week with limited in-person meetings,” said Reddy.
“However, if you have to go into the office daily, or attend several daily meetings that require travel, this option then becomes expensive.”
If your finances are unstable, Stern suggests considering rent-to-buy.
“When your financial position is not stable or if you expect that you will be under financial pressure in the short term, rather consider options like rent to buy,” said Stern. This way, you have access to a car that you can swap, cancel or buy at any time.