Owning a car, for personal or business use, is a dream shared by millions and millions of people across the world. However, not all get to own one in their lifetime. Buying a car is an exciting but daunting task, especially if you don’t know much about cars. Some few years ago personal car ownership was considered a status symbol for being very rich. However, the narrative has since changed and cars are even more affordable than ever.
The main reason as to why many people own good cars is because several car brands have come up in the motor industry. The increase in car brands has made car manufacturers compete for sales hence leading to a drastic drop in car prices. Having a personal vehicle has become a necessity because life has changed much. Every person nowadays wants to achieve convenience in commuting, and that comes with owning a car.
For many people, owning a car is a very big achievement, so you want to purchase a car that looks the part, runs smoothly and is a good deal for your budget. If you don’t do your homework well, it is easy to end up in a money pit. This is especially true of second-hand cars that may have hidden faults that will require you to spend more than you had anticipated on repairs and spare parts.
Whether you’re buying the car new or second-hand, here are some key factors to consider.
1. Your budget
The first thing you need to do is determine how much you’re willing and able to spend on a car. Ensure the type of car you want fits your budget. While many people buy their first cars through loans, if you can afford it, it is better to buy a car with cash. This is because cars depreciate quickly in value and require more money to service and maintain. It doesn’t make sense to incur the extra expense of paying loan interest.
If you opt to take a car loan, nevertheless, shop around for a plan that is suitable for your monthly income. The general rule of thumb is that you should not spend more than 20% of your monthly income on car payments. Remember, this number is a general guideline – you shouldn’t necessarily go that high if your financial situation doesn’t allow it. Ideally, your car loan payments should be below 10% of your monthly income.
Before purchasing a car, consult an insurance agent. Car models and the age of a car might affect the amount you’ll have to spend on insurance premiums. It’s also advisable to compare prices before buying a car. Fortunately, if you don’t have time to walk to different car dealerships, you can do this by checking online car selling platforms.
2. New or second-hand car
Another factor to consider is whether you should invest in a new or a second-hand car. The answer to this depends on factors such as your budget and preferences. Generally, new cars are more expensive than used ones and attract higher duty taxes from the government. But if funds for the initial purchase aren’t an issue, a new car is a good investment. If you can buy a well-maintained second-hand car, it might be an even better investment.
Cars are a rapidly depreciating asset. A new car will lose approximately 20% of its monetary value in the first year alone. After the first year, a new car will depreciate by approximately 10-15% every year until it hits the five-year mark. This means that after owning a new car for five years, it will have lost around 60% of its original value.
If you opt for a used car, especially if relatively new, the depreciation rate should be gentler. To calculate depreciation of a used car, consider factors such as mileage, age of the car, it’s general condition, the model and the number of owners it has had. A bulk of car sales in third world countries are from lower-priced second-hand imports from countries such as Japan.
Many people prefer imported or locally-used second-hand cars since they are cheaper and attract less taxes from the government. Before buying a used car, bear in mind that the lifespan of a car is 10 -15 years by international standards. But in other countries, the lifespan can go up to 20 or 25 years. Many second-hand cars imported into different countries have already been on the road for about eight years.
In a few years, it is likely that you will spend a significant amount of money on repairs and spare parts. In comparison, new car may require servicing every four months. It may not need any spare parts for the first three years. If you buy a new car from an authorised dealer, you also get a car that is tropicalised from the factory for local road conditions.
3. Availability of spare parts
It will be less stressful when you choose a car model that has spare parts available at the local car dealer shops or garage. In your live in an undeveloped country, you will find that many urban roads are replete with potholes, while almost all rural roads are unpaved and bumpy. Such conditions mean your car will deteriorate faster, increasing the need for spare parts and repairs. With this in mind, it is advisable to go for models that have spare parts readily available in local shops and garages.
If your choice is Toyota, it will be better for you since easy to maintain. Toyota engines are simple in design and maintenance. Many mechanics are able to cope with the rapid changes in engine technologies as Toyota endeavours to maintain similar design philosophies to enhance the principle of ‘commonality’. Toyota owners always have a return on investment as the vehicles still fetch good prices after considerable use due to the fact that they don’t break down and are durable enough over long periods of times.
4. Your needs
What is the main reason you need the car? Is it a leisure vehicle, for daily commute or for leasing out? How you intend to use the car is an important factor to consider before purchase. For instance, if you need the car for daily use, you need to go for a car that is fuel economical. Going for hybrid vehicles or those with lower engine capacity usually means better fuel economy. Also look at features such as sitting space (especially if you have a family), off-road capability if you’ll be travelling upcountry, and fuel tank capacity to ensure that you can travel long distances without needing to refuel.
5. Decide on brand, model, type, fuel, transmission, and colour
Once you know your needs, you should consider your personal taste. This revolves around the following:
- Decide the vehicle brand. Do you want a BMW, Toyota, Mitsubishi, Mercedes-Benz, Volvo, Honda, Audi, Lexus, Mazda, and so on
- On vehicle type, you need to decide if you want a hatchback, sedan, MPV (multi-purpose vehicle), an SUV, crossover or a convertible
- Decide on vehicle transmission. This has to do with how gears are shifted. An automatic one is where the car decides which gears to sift to while a manual one, you must do it yourself using the clutch and gas pedals
- Decide on colour. The most common colors are silver, grey, white, black and red. White and silver are often considered safer colors as they are more visible. However, you should go for one that looks good to you
- On fuel type, you have an option of going for electric, hybrid, petrol and diesel vehicles
- The car model is a way manufactures group similar vehicle together and refer them as a certain model. This has something to do with certain years of the manufacturer
6. Fuel consumption
Fuel consumption is also a very important factor to consider before buying a car. You should go for a car that uses less fuel. That is why it is important for you to consider an economical car. Also, you will need to consider your income.
7. Look at expert reviews
You may not be an automotive enthusiast, geek or guru and things such as model, brands or type may not make sense to you. However, being an important investment that will cost you a lot of money, ensure you read expert reviews. Checking reviews of the car model you are intending to buy can help you make a better decision since other car users usually give insights about different vehicles.
Reviews will give you an insight on price range, model, key features and specification, pros, cons, driving experience, safety rating, resale value, and so on, on most vehicles. You can check the reviews on various car dealer websites and you will be able to make a wise decision when buying a second-hand car. Also, solicit professional advice or inquire from some of your friends who have a similar car to the one you want to buy or know more about automobiles.
8. Take the car for a test drive
Go for a long test drive (at least 30 minutes) and have the car assessed by a trusted mechanic before finalizing the purchase as he/she will be able to certify on its condition. Do your test drive on both on and off-road (such as a rough road). This is particularly very important for second-hand cars. Hit brakes, try packing it, take a corner, change lanes, accelerate, and so on during a test drive. Also, make sure you check the interior, bodywork, engine and so on.
9. Inspect the car
Where you are not familiar about cars, you can contact a trusted mechanic who will inspect the car tire pressure and alignment and will also perform routine brake check. For every 1,000 miles removed from the odometer, it increases the value of the vehicle substantially and is a highly illegal practice. It is worth checking for signs of tampering. Examine the dashboard for worn screws.
Look for chips made by stones across the front of the bonnet, grille, and bumper, these can be an indication of many motorway journeys. Most cars average around 10,000 miles per year, so check the mileage on the clock roughly ties in with the age and appearance of the car. The mechanic will check five important areas of the car. These parts are; exterior part of the car, tires, interior part of the car, engine and transmission, steering and suspension.
10. Consider insurance costs
How much your car insurance premiums will cost will have an impact on the overall cost you will incur. The cost will depend on which cover you go for, the value of your car and the insurance company you choose.
11. Check details on paperwork
It is important for you to check the paperwork,to know if the car has been stolen or not. It will be critical for you to know the details of the previous car owner. Conducting car online search and verifying the information on the logbook, gives you a stress-free process for you when buying a second-hand car from the car dealership. The car dealer will help you in accessing the vehicle search history report, which will indicate if the car has a car ownership saga.