New versus pre-owned: Making the right fiinancial choices

New versus pre-owned: What’s best is what suits your budget. Photo by WesBank

New versus pre-owned: What’s best is what suits your budget

New vs pre-owned vehicles. WesBank has the perfect car finance solution for you, whether you want to buy new or pre-owned.

New versus pre-owned: Making the right fiinancial choices

New versus pre-owned: What’s best is what suits your budget. Photo by WesBank

10 August 2022:  New versus pre-owned? This is the question we all ponder on at some stage in our lives for all manner of items. However, it seems even more pertinent when considering buying your first car. Perhaps you are a recent graduate, have entered the workplace and are starting to make your mark. Becoming financially independent gives you the freedom to make purchasing choices to improve your quality of life. Owning your own car certainly ticks all the boxes and gives you freedom of movement.

But now, the question is what to buy: a new car or a pre-owned car that has been cared for and well maintained by its previous owner? Apart from the cost implications, there are advantages to owning either a new or used car.

“A new car comes with no prior history which means you are in full control of how well it’s driven and maintained. You’ll also have options such as maintenance plans and warranties from the manufacturer – a definite plus for managing costs and risk, but you need to do your homework and understand what these plans include and exclude.”

Kutlwano Mogatusi, WesBank Communications Specialist

 “Used cars, on the other hand, already have a driving history. Look for a used car where the previous owner has kept a detailed service history, and ask questions about the current condition of the car – are there any issues you should be aware of, or has the car been involved in an accident. If the vehicle is in good condition and the mileage is reasonable for its age, a used car could be a very good buy in the long term.”

New versus pre-owned budgeting and finance

Applying for WesBank finance on a used car is the easy part. The hard part is deciding on the right car. Ultimately, that decision lies with you. The following considerations can go a long way to helping you decide. As a first time buyer, there are many things to consider when making this budget-impacting, big ticket itemt purchasing decision.

Affordability may be the most important factor to consider when deciding what car to buy, and the reality of adulting is that you need to buy within your budget. Using the affordablity calculator on the WesBank App or website is quick and easy, taking the guesswork out of knowing what youcan afford on your monthly budget.

Another hurdle you might encounter is the lack of credit history if you have only recently entered the job market. Under normal circumstances, this could be a negative consideration when applying for vehicle finance to buy your chosen car.

“With the WesBank Graduate Finance offering however, your credit score is  one less thing to worry about. The application process to check affordability and get approval for a vehicle finance deal can be done online, and it only takes a few minutes’” says Mogatusi.

More cost considerations

You also need to remember that there are more costs involved when buying your first car than the monthly repayments. While the right time to buy your first car could be now, affordability is key. Make sure you consider all the expenses that come with independent mobility and act responsibly when making the financial commitment.

If you can afford to buy a new car, make sure you get the best value on the vehicle for your hard-earned cash – as such, it is recommended to buy your car from a licensed and WesBank-approved dealership. This includes not compromising on safety features such as ABS brakes and airbags and your needs regarding space and add-on extras. Make sure that you understand the details of the contract and ask questions if anything is unclear – once you sign on the dotted line, the contract is binding.

If you buy your new or pre-owned vehicle through a reputable dealer, you are likely to be offered an extended motor plan, service plan or warranty as part of the purchase agreement. These are insurance-related products to protect you from unforeseen costs down the line, and it is advisable to consider including such plans, budget permitting, for extra peace of mind. These options can also take some burden off your wallet when the time comes to pay for the car’s services and general vehicle maintenance when the standard maintenace plan or warranty expires.

“Remember to include other recurring costs apart from the agreed monthly installment. The cost of fuel is at an all-time high so look for a car that is fuel efficient. Comprehensive insurance cover on the vehicle is a non-negotiable. Premiums vary depending on the car and service provider you choose, so do some research before signing an agreement. Installing a vehicle tracking device is an additional security measure – it comes with a monthly payment but it could also mean a reduction in insurance premiums. All these costs need to be managed and included in your budget,” says Mogatusi.

If you decide on a pre-owned car in good condition, WesBank offers the following advice:

  • Check the service history of the car: pre-owned cars should come with a full-service history (FSH) that reflects the real condition of the car. A car without a recorded service history may come at a reduced cost, but could be risky in the long run.
  • The Vehicle Identity Number (VIN) serves as the fingerprint of the car: the VIN on the license disc must match the one on the car (usually stamped where the windscreen meets the dashboard).
  • Find out if the car has been involved in a major accident: the effects of a major accident could result in mechanical damage to the vehicle that could present costly problems down the line.
  • Test drive the car (preferably with someone who is knowledgable about vehicles) to get a good feel for the car’s driving dynamics, features and comfort levels. A test drive does not come with any commitment to purchase, so don’t feel pressured to make an offer to purchase – take time to think it over.

“While there is something special about the smell of a new car, there is nothing wrong with the smell of a perfectly valeted pre-owned car that fits your budget more comfortably. Ultimately, the choice is yours but, either way, take your time, do your homework thoroughly and ask as many questions as possible. How you tackle this big budget decision-making process will set the course to determine the overall experience of buying and owning your very first set of wheels – enjoy the ride!” concludes Mogatusi.

Posted by WesBank on Motorpress

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