Thinking of buying a new car? Here are the real costs of ownership to consider

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Finding the right insurance for your vehicle
Finding the right insurance for your vehicle

Purchasing a vehicle entails so much more than just paying a monthly debit order.

Fuel, insurance and maintenance costs are some of the important factors to consider when buying a vehicle.

There are also a few things to keep in mind if you're buying a pre-owned vehicle.

For more motoring stories, visit Wheels24.

There is no doubt that there are many benefits to buying your own wheels. For many people, it's the convenience of being able to travel whenever you want. And for some, a car is a necessity for work, or because public transport is not readily available.

But what are the actual costs of buying and owning a car? And, given that many of us are now working from home and travelling far less is ownership worth it? We spoke to experts to give you a breakdown of the costs that come with car ownership.

READ | Driving with J9: The honest truth about buying a used car - what you really should know

What are some of the most important factors you consider when buying a new or used vehicle? Please email us or share your thoughts in the comments section below.

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Nissan Finance. Image:

Costs to consider 

According to Kriben Reddy, vice president of auto information solutions at TransUnion Africa, the following are the costs you need to consider when deciding whether you should buy a car:

1. Fuel

Beyond a deposit and monthly premiums for non-cash purchases, the first significant 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.

2. Insurance

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.

READ | Want to sell your car for a profit? Be smart about it and wary of potential pitfalls

Find out more about which car insurance is the cheapest for young drivers here.

3. Motor/service plan

If you are buying a second-hand car that is almost out of a motor plan or a brand-new vehicle where you opted against a motor plan to increase your chances of affording the car, this is a cost you will have to consider.

4. Maintenance costs

These range from renewing your license disc annually to replacing tyres or any other parts that aren't covered by either your motor plan or insurance.

mechanic working in engine

JustMoney's Shafeeka Anthony says: "In addition to these variables, keep in mind that the number of kilometres you drive annually, the type of terrain you cover, and even the way you drive, will also affect the cost of running a car.

"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."

What are the alternatives?

The cheapest alternative to owning a car, other than walking or cycling, is, of course, public transportation. E-hailing services, such as Uber and Bolt, cabs or car rentals can work out to be more expensive than a vehicle purchase.

"E-hailing is cheaper if you are going into the office once a week with limited in-person meetings. However, if you have to go into the office daily or attend several daily meetings that require travel, this option then becomes expensive," says Reddy.

"Dov Stern, director at MotoMatch, says it all boils down to your budget and your ability to finance a vehicle or purchase the one you want outright.

Buying a new or used vehicle

"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," says Stern. In this way, you have access to a car and can swap, cancel or buy the car at any time.

It may be cheaper to buy a car on auction rather than through a dealership. Find out more about how car auctions work and whether you should consider them here.

What about second-hand cars?

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, Stern says.

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 000km, so be aware of 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.

• Ensure 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.

"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. As with all major investments, it's 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," says Anthony.

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