Although drivers have seen five welcome decreases in the petrol price this year, the continued lockdown is taking its toll on stretched household budgets as many South Africans are forced to stay home or work reduced hours for reduced pay. In this environment, the choice to look at older, cheaper cars makes sense.
Older cars have already seen the steepest part of the depreciation curve and hold value better than brand new vehicles. Smaller, less expensive cars are usually also cheaper to maintain in the long-term.
This also ties in with lockdown data from online car sales group, Autotrader, showing a 20% increase in consumers cruising their pages from 23:00 and 03:00, with emphasis on cars priced under R200 000.
The increased activity is most likely coming from financially pressed consumers who are looking to downgrade their cars so that they can free up cash.
In the current circumstances, it's a no-brainer that drivers are looking at more economical vehicles. Cars under R200 000 mean a smaller finance instalment each month and can also translate to a lower insurance premium than a more expensive car.
What do you look out for when buying a second-hand vehicle? Please email us here.
More car dealerships should start trading during level three of the COVID-19 lockdown, opening up further opportunities for car sales.
Reassessing your choice of car and downgrading can be a good budget decision in a tight economy. However, make sure you do your homework before you make any purchases or trade-in your current vehicle.
Buying a second-hand car tips from Budget Insurance
Before you sign on the dotted line, the AA has the following handy tips when buying a second-hand car:
1. Examine the engine. Look for oil leaks under the car and any obvious signs of wear and tear. The wiring in the engine bay should be in good condition.
2. The radiator and cooling pipes should be free of leaks. If the engine is cool, open the radiator cap and check the condition of the coolant. This should be a transparent coloured fluid (it may be green, pink or yellow).
3. When you start the engine, listen to how easily it starts and if it idles well. Rev the engine slightly and listen for any abnormal noise. Rev the engine with a short, sharp acceleration and check for excessive smoke from the exhaust. Thick smoke is a bad sign.
4. The wear and tear on the carpeting and the rubber of the brake, clutch and accelerator should be consistent with the age of the car.
5. Uneven wearing of the tyres will tell you that the wheels are off-balance, the suspension is not aligned, or the shock absorbers are worn.
6. Look out for signs that the car has been in an accident. These include mismatched paint on adjacent body panels, unequal gaps between the body panels and apparent signs of over-spraying (look behind the rubber around the doors and windows).
Another bonus in buying a more economical car is that if it's worth less than R100 000 and isn't financed, you can get more affordable non-comprehensive cover. These kinds of plans cover options like third party, theft, hail cover, accident assist (includes towing from the scene of an accident and storage of your car) and limited accident cover up to R15 000.
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