Dear Mabs
I started a new job in October, and I have a car allowance. At the time we only went to the office twice a week and I was using my mother’s car. However, since January we are expected to be at work everyday and I need a car since I live far from the office. I no longer have the option of my mom’s car; she is a teacher and needs it to get to work. My boss has been asking me when I’m buying a car. I have my favourite car brands, but everything seems so expensive for my R7500 a month car allowance. I really have no idea where to begin the process of buying a car and I don’t want to rely on my mom, please help.
Mabs Answer:
Being new in the car market can be overwhelming since there is a lot to consider. However, I will take you through a few basic steps to consider before you embark on a huge, long-term financial commitment.
The first step is to do a thorough research based on your available budget. For example, with a monthly budget of R7500 you might think you have enough to buy a small family car. However, apart from the monthly installments there is also fuel and insurance that you still need to factor in. So, there is quite a lot to consider before signing on the dotted line.
Needs assessment:
Before you set out, first analyse your own needs. Ask yourself these questions. Are you after a basic car that will take you from A to B? How important is comfort and safety to you? How much space do you need in your car? Do you want a new or used car? Once you have answers to these questions, then you can move to the next step.
Car Selection
Do some desktop research by visiting manufacturers’ websites to check what car you can get for your monthly budget. Most manufacturers have online tools for consumers to play around and see what they can afford. Also, check out used car merchants. Note that you are likely to get more car for your money when you buy a used a car. However, you will also be inheriting problems unlike when you are the first owner of a new car. Also, check reviews of the car you have in mind. What are the common problems that people complain about and how has that manufacturer responded to those issues?
Finance
Unless you have a large sum of money stashed out somewhere, chances are that you will need bank finance to afford a car. Most people do. Once you have a price of the vehicle you have in mind, check out how much finance you qualify for. Most people usually leave this important step to the salesperson. But it is important to first shop around without pressure from a salesperson who wants to make a sale and might gloss over some important information that will impact you going forward. By shopping around on your own, it will help you to determine how much you qualify for, the duration of the loan and monthly repayments. You can shop online or make calls to the different financiers and make your decision.
Insurance
Yes, this is also a critical step since you will need to ensure that the car is insured the minute you drive it off the dealership floor. Once again, call around and find out how much you are likely to pay for insurance for the car you have in mind. Insurance is personalised and considers your age, how long you have had your license for, where you live and if the car will be kept inside a garage etc. Take the time to shop around and compare the amounts.
Once you have gone through these steps, you will be empowered and ready to take that first step towards buying your first car. I wish you the very best with your first car.
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