Before you commit to buying a car...

Before you commit to buying a car...

Before you commit to buying a car, it’s essential to create a budget in order to establish affordability factors.


Whether it’s a compact car that offers lots of spunk, or something tough and rugged that allows you to channel your inner Chuck Norris, with so many vehicle models on the market choosing a new car can sometimes prove daunting.



Musa Wilkinson, Head of Marketing and Communication at Fiat Chrysler Automobiles South Africa, says that though choosing a new car is always exciting – particularly if it’s the first set of wheels that you will be calling your own – but making an impulsive buying decision could be one that you live to regret. 




Instead, he suggests taking the time to do research to ensure your new four-wheeled friend is the right fit for you. “Investing in a vehicle is probably one of the most important life decisions you will ever make,” he says.



“Ask any veteran car owner to list the vehicles they have owned – most will instantly recall which they considered good or bad purchases. 




To ensure that buying a car is memorable for all the right reasons, gathering enough information to make the right choice that suits your needs is essential.”



It's important to create a budget in order to establish affordability factors. The budget has to go beyond just potential installment repayments – insurance, monthly fuel costs, toll fees, maintenance costs and the possibility of future interest rate increases also must be included.



In order to obtain finance from a bank, you will need to have a good credit history. Wilkinson points out that graduates who have recently gained employment may have to work for a while before they build up enough credit history to be eligible to apply for vehicle loan. 



However, FCA offers Graduate Jump-Start Finance that has been specially designed to enable new graduates to own a car, making a credit history less essential. The offer also provides additional benefits such as not having to pay a deposit and includes car insurance for a year. Other financial institutions may offer similar packages.  


Advice to vehicle buyers:

  • Purchase the vehicle you need, rather than the one you want but can't afford. Be realistic when it comes to the short list of cars you are considering – SUVs might be highly aspirational, but affordable, fuel efficient vehicles will serve you well if you under financial pressure, and you’ll thank yourself for your decision every time you have to fill up after a fuel price hike.


  • Always maintain your vehicle and limit the chances for unforeseen car-related expenses. For buyers of used or second-hand cars, look out for vehicles that come with a warranty. If possible, try to extend the warranty or maintenance plan if these are included as part of the sale.


  • Be cautious of balloon payments. While the option may provide you with more affordable monthly repayments up front, it ultimately includes a parting gift in the form of a substantial outstanding amount that you will have to repay at the end of the loan period. Make sure that the outstanding balance will be covered by the value of your vehicle when you opt to trade-in it in or sell it to buy a replacement vehicle.


  • While it may be a grudge purchase for many, car insurance should be a mandatory inclusion in your car budget. If your vehicle is written off in an accident, you will still need to pay it off. Insurance will also help to cover potential third-party claims.


These tips should ensure that your journey to owning your dream car doesn’t turn into a financial nightmare.