ShowMe Motoring – Tips When Buying A New Car
Vehicle Buying Know How
So you are on the hunt for a new car? Congratulations. the task may seem to be daunting, we know. with consideration needing to be made about warranty, service plan, vehicle finance and more.
Many of us buy houses in the same manner; We hunt for months even years to find the perfect one, we sort out our finances and contact the bank and various parties way before the time.
Surprisingly car buyers do not adopt the same practises even though they should.
Here are some tips to make the selecting and buying process easier on you!
Select a Dealership
Once you have decided on the car of your dreams, browse through dealerships that sell that specific make and model. Ensure the dealer is a member of either the Retail Motor Industry Association (RMI) or Independent Dealer Association (IDA). These associations have rules of accreditation, codes of conduct and compliance with legislation.
These rules and regulations are designed to protect the consumer.
The Sale
A sales person will take their time to perfectly pitch the vehicle too you! Take your time, listen carefully and be sure to grill them about extra’s, services and warranties. Insist on a test drive and on different road conditions. If you feel it is necessary, insist on an independent roadworthy test. When buying a used vehicle, you need to consider warranty, service and maintenance plans offered by dealers.
The finance and insurance consultant can play a critical role in the process.
Finance
Your application to purchase the car will be sent to the bank of your choice. It is your own right to select the bank and not the dealerships choice. Remember to be warry of in-house finance not backed by reputable banks.
f your application is approved in terms of the National Credit Act, a consultant must provide you with a written quote from the bank detailing:
1 The amount approved
2 Deposit required
3 Contract terms
4 Interest rate (look out for fixed or linked-rates options)
5 Fees and charges payable (the maximum initiation fee allowed by the NCA is R1140, including VAT, and the maximum monthly service fee is R57, including VAT)
6 Cost of credit over the term of the contract.
It’s important to check whether residual-value or balloon payments are included. These are large once-off payments at the end of the loan term and they could have huge financial implications once the contract ends.
Take your time considering the quote as it is usually valid for up to 30 days.
Signing the Contract
On acceptance of the quote a financial agreement will be prepared by your bank.
As the client, these are the following are important aspects of the vehicle purchasing procedure:
1 A good credit history. Any adverse reports/blacklisting and bad credit references will be taken into consideration.
2 A valid driving licence will be required as part of the application process.
3 Proof of insurance will also be required and must be valid for the duration of the agreement.
4 Once the vehicle is ready for delivery, the finance agreement must be signed.
5 Only sign the contract once you’re satisfied with the vehicle.
6 A signed delivery note, once in the dealership’s possession, is as good as cash. A bank cannot withhold payment to the dealers if the client has signed the contract.
Financial Agreement Checklist
1 Loan amount
2 Deposit
3 Extras and accessories
4 Terms of the contract
5 Interest rate
6 Monthly repayments
7 Debit order details
8 Payment due date
9 Residual value or balloon payment structure.
Local Service Providers:
Source: Trevor Browse – Wheels 24 (Media 24)