Avoiding car buyer’s remorse

Five things you need to consider before buying a vehicle.

I don’t like parting with money. Call it being stingy, a cheapskate, whatever.

I don’t like spending money in fact, saving money gives me a high like I’ve just snorted up a line of cocaine. Not that I’ve ever done cocaine, this is an analogy, I don’t do drugs!

In 2016 when I bought my first car it actually took me a while to do it. My parents had bought me a spitlana (city car) back in 2012 with about
70 000 km on it and she ran quite well.

It’s different though, being given a car versus buying your own and while writing this post I came across an Owners Satisfaction Survey by Consumer Report who surveyed people who owned cars modelled in 2014 – 2017.
In the survey they asked the car buyers:

“All things considered would you buy the same car again?”

Most respondents in the survey said yes BUT about 30% said “no”.

Rotate those wheels any which way you want, 30% is a lot. That’s what? One in every third person who regrets buying the car they bought.

I know what you’re probably thinking:

“If you already owned a car and with stats like that, why buy a new one?

 Or

 “Your car was nearly four years old, it was time to replace it anyway.”

 

Well, both of these thoughts have some truth them.
Yes, I owned a car and replacing it was never a priority for me.

But after I got into an accident and Phoenix (my car) started becoming a little bit more expensive to maintain, at around 130 000 km, I considered it.

Actually no, that’s a lie she wasn’t more expensive to maintain, it just felt like it because well, I don’t like spending money.

I realise now how ridiculous I was being, complaining about spending money once a year on maintaining my mode of transport so… let’s just move on.

After months of talking myself into and out of buying a car I eventually did it. And although I may fall into the 70% of people who would buy the same car again, there are a few things I wish someone had warned me about and somethings I did consider so I’m sharing these with you:

1                Category, cost and cover

Depending on where you are in your career (financially) there are probably four categories you might be thinking of:

  • City car,
  • Supermini
  • Hot hatchback, or even
  • a Sedan

Whatever it is, the cost of that car is about way more than instalment.

Financing
Being a saver my initial instinct was to buy my first car cash like my parents had done with Phoenix.
Ha! Do you any idea how expensive cars are?!
I did not, so I gave up on the idea relatively quickly. (Don’t let that discourage you, learn from me – be patient.)

To deposit or not to deposit?
Definitely, deposit.
If you’re taking the car loan route, put down that deposit. That doesn’t mean you go and get a different short-term loan on top of the car loan you’re already going to get. Please don’t do that. Mastery in debtor absorption is not a qualification you need.

My plan was to put down a big deposit by selling my car (my previous one) – privately because dealerships will not give you a decent trade-in value, real talk!

See a bigger deposit = smaller vehicle loan = shorter loan period = less money out your pocket

What is a reasonable amount to pay for your car?
Spoiler Alert: I am not a financial advisor. This is all based expert advice I read up on and the two that made the most sense to me was:

  • One: the debt you are taking up should never be more than 36% of your salary – net salary, because what is gross (roll eyes)?!Remember:  the sale price at the dealership vs how much you will be paying for the car loan is not the same thing. Banks need to make money off you too it’s called interest
  • Two: If a car is a necessity to you, it and all your current expenses should not be more than 55% of salary, that’s according to Wealth Chef Ann Wilson.
Wealth Pie
Source: www.fin24.com

Petrol and insurance
After driving a 1.1-litre car for about 4 years I was definitely not used to spending a lot of money on fuel. Whichever car I was replacing my spitlana with had to have a similar petrol consumption.

Thus a 1.4-litre engine was the absolute highest I was willing to go.
This meant that I was spending about oh, R100 more on fuel.
I was cool with that.

 

What I was not cool with was spending more than a thousand rand on insurance.

 

Insurance cover based on where you live, where you park and, and, and, and can be the deal breaker on whether or not you even get a car.

Calculate that and petrol and financing you can actually get to the fun part – (car) shopping!.

2                It’s a reflection of you

Before you get your panties in a wad about how I just gave the longest sermon about being financially savvy when buying a car is and now I’m contradicting myself – relax. I distinctly remember saying that I ‘m an almost cheapskate.

So in case you missed it, financially savviness is a reflection of my personality and if I’m going to buy something it’s going to be affordable but I also have to like it!

Love the car
Look, you’re going to be getting into this car every day and pay for it every month for the next 2 – 6 years you better like it, love it even!

I wouldn’t risk letting that love grow on you because buyer’s remorse is real.

Source:www.mensxp.com

3                Minor details

At my house, there are six cars parked in our two-door garage home.
Yes, you read that right, six cars.
Only three of these actually fit into the garages, the third one has to almost kiss the other in order for it to fit.

You and the car you’re thinking of buying are going to be in a very serious long-term relationship it needs to make sense for your life. (Long term may be an exaggeration to you, but I am an almost cheapskate and paying for something more than six months feels long term.)

Car seats and coupes don’t mix cousin.

You and the car you’re thinking of buying are going to be in a very serious long-term relationship it needs to make sense for your life. (Long term may be an exaggeration to you, but I am an almost cheapskate and paying for something more than six months feels long term.)

4                Vehicle Plan

Okay so now that you have a plan (budget and search criteria), find out what the vehicle’s plan is.

Service
I don’t drive often nor very far. In fact, there better be a damn good reason for any return trip that is over 100 km. That being said if you drive far and/or your job requires you to drive far/often (you know that job requirement trap of “must have own vehicle”), take very careful note of the service plan.

  • Will the service plan need to be renewed?
  • Does the service plan match the number of years of your vehicle loan?
  • What does it cover?

Maintenance and reliability
Parts are expensive, so whichever model you are considering research the amount of money it’s going to cost you to get parts and whether or not they are readily available. Also, ask people who drive the cars you like what their experience with the car is – this was a huge eliminating factor for me.

Source:www.mensxp.com

5                New vs Used

I am not a baller so dropping money bags for a brand new car is not happening, so my opinion on this is a little biased. But if you can afford it (refer back to
point 1) by all means go for it, buy a new car.

However, did you know that there are these wonderful things called demo cars that you can get with very low kilometres at a lot less than a brand new car?

It’s easy to get distracted and even tempted by what the next person is driving. Cars get facelifted and redesigned all the time and being trendy and looking superficially rich will impoverish your bank balance.

If you’re going to buy a car you may as well rent it for a week or two to get an accurate feel and cost of owning that

If you’ve gotten this far without falling asleep, kudos to you. Financial talk can be so boring. Buying a car is exciting and I hope I didn’t strip you of that excitement. Any purchase you make should be thought out, don’t ever get caught up in the emotion of impressing others.

A good car will get you from point A to B, an impressive car will get you into trouble.

Leave a Reply

Your email address will not be published. Required fields are marked *