Auto Advice for information on buying and sellign cars in Cape Town

Topics

After Market Warranties

Every dealer nationwide will offer a short used car warranty of 30 days or 2000 kms ( whichever comes first) on any retail quality car. Cheaper vehicles are sold cash as they stand (or Voetstoots) and will carry no warranty. This is normally clearly stated on the invoice. This warranty has been around for a very long time and covers the main mechanical components only. Generally labour costs or for the customers account, although in my experience this is rarely enforced and most dealers will go far beyond the written conditions of warranty to keep a customer happy.

Understanding Book Values

Most people only look at the last column of figures in the book. What do all the numbers represent? Most people who get access to the Auto Dealers Guide don’t understand the numbers and columns, nor do they read the the guidelines at the beginning of the book, which are actually very important. There is a general misunderstanding of what the columns of figures in the book mean: The Trade/Retail values in the 'book' are meant to indicate the following: 

Security & Scams

How can I protect myself from being “caught” by a fraudster? This subject could be a whole book, but I will keep strictly to the point. Don’t do business with someone that you don’t know or have not been referred to by a reliable source. Easier said than done of course. Use your common sense and err on the side of caution.

Roadworthies

In South Africa every car that is sold must pass a roadworthy test before it can be registered and licenced in the new owners name. In the past only municipalities and local authorities were allowed to perform this test. A few years ago the government expanded the programme to include private firms. Their charges are a bit more expensive than the government testing stations, but the service is far superior. One of the better and bigger companies is AVTS (Airport Vehicle Testing Station). There are many new firms all over the country and this has taken a lot of strain off the old municipal stations. The inspectors have to undergo training with the SABS (South African bureau of Standards) who run regular inspections on all these stations to ensure that they are complying fully with the legislation. It is advisable to have your vehicle’s engine and chassis…

Resale values

Let's look at resale values a little more closely and I will try to explain how the market forces affect each and every product on the market. Some vehicles, like Volkswagen, Mercedes & Toyota for example, have excellent resale values - yet other vehicles don't hold their value as well. Why is this? Who determines the book values we all hear about? It is a mixture of SUPPLY AND DEMAND, product quality, and public perception. Supply and Demand is the primary driving force in every free market economy. It will ultimately override any 'book value guide'; government intervention, price fixing, or market manipulation. Within each manufacturers products there are further anomalies. For example, just because it is a Toyota does not necessarily mean it will have high resale value. Certain of their model ranges are not good sellers - for example the…

Registration Certificates

What useful information is available to me as a buyer on a vehicle registration certificate? Most people don’t know the difference between a licence receipt and a registration certificate. In very simple terms, a licence receipt is the document on which you have cut out the licence disc. At a casual glance the two documents appear to be very similar. A registration certificate will have the words CERTIFICATE IN RESPECT OF REGISTRATION OF MOTOR VEHICLE right at the top. This is the important one and the document that will tell you a lot about a car. It should always be an original. A copy is worthless. The paper is a greenish tint and is similar to cheque book paper. Where do I find the year of 1st registration? BEFORE buying, ask to see the registration certificate. First thing you check is the year of first registration. I…

Recessions & Repossesions

As we all find ourselves in the midst of a deepening recession; inevitably there are consequences to over spending. For most of us our cars are our second biggest investment and we must try at all costs to maintain those monthly repayments. But what happens when we skip a payment? During tough times, once a repayment has been skipped, it becomes very difficult to make it up. Consequently your account remains one month in arrears for a long period of time and your account will continue to attract interest on arrears. The more payments you skip, the worse the multiplying effect of those interest charges become. Contrary to what many people think, the banks are not waiting drooling to repossess your house or your car. In fact that is the last thing they want to do. Just for interest’s sake, it is really bad business for the…

Odometers

How on earth do we know if the reading is accurate? Why do some people turn the mileages back (what is commonly known as a ‘haircut’). Firstly it constitutes fraud and is a criminal offence. People do this to gain a higher selling price. If there aren't service books AND a contactable previous owner, just walk away and take your business elsewhere. In all the years I have been in this business, I have rarely heard a genuine case of the books being missing. 99% of the stories are pure nonsense. I can look at a steering wheel, upholstery and foot pedals and tell you within 10,000kms accuracy what the actual mileage of any vehicle is. Here is a list of the usual reasons people give me for not having service books:  They broke into my car and stole my service books (Yeah, right!)  I packed them away…

New or Used?

Which is the better buy? New or used? This is one of the most common questions I get asked. From a pure ego point of view, undoubtedly new beats used, but from a Rands and Cents point of view, used is king. How can I say that? Well…lets start by looking at the Auto Dealers Digest and you will see that there is no book value for cars of the current year. They start with 2007(at time of writing in December 2008) Lets take an arbitary example. A 2008 Audi A4 2.0 TDi sells new for R 298000. The book retail value of a 2007 model is listed as R 229000, whilst trade value is R 199300. That is a drop of R 98000 in one year. In that specific case, if you had put your ego in your pocket you could have been at least R…

Motor Insurance

My first word of advice here is to read the small print. You get policies and you get policies. Some have high excesses and low premiums, others have the opposite. There are certain things that they all have in common: Male drivers under the age of 25 are penalized heavily on premiums High performance cars carry very high premiums Your car needs a good immobilizer system to reduce premiums Older drivers and women are rewarded with lower premiums Value Added Products:There is wide array of insurance based products available on the SA market. Purchase Protection Insurance: This policy will protect the outstanding debt in the event of death or disability Shortfall Cover: This policy will protect the buyer against the possibility in the event of an accident, that the amount paid out by the comprehensive insurance policy, does not fall short of the outstanding balance of the…

How to sell your car

Here is some useful information on how to sell your car privately. We can break the process down into three sections: Preparation, Marketing, and Conclusion. Let's start with preparation. What is more important? Cosmetic items or mechanical items? Take a good look at your car and focus on any of those obvious 'in your face' items, like a cracked windscreen, a tear in the upholstery, a damaged dashboard, or dents and scratches in the paintwork. Let me assure you that the cosmetic side of things are far more important in selling, than mechanical issues. Before you can even hope to get to second base in the sales process, the buyer first has to like what he/she sees. Visual impression is everything. Once you have dealt with the obvious cosmetic items, send your car for a professional valet. A neat, clean…

How to buy a used car

1. Phone first and confirm all the details in the ad are correct. Focus on year model, engine size, exactly which model (GL, GLS etc.), Extras, Mileage. Save a copy of the actual ad. Check the prefix of the phone number. Stay away from dubious areas.2. Make an appointment to view the car. Take someone with you who knows about mechanical things if you don't have the knowledge. Don't appear to be over eager to the seller. 3. Break your inspection up into two segments. Bodywork and mechanical. Start with the bodywork. Walk slowly around the car starting and ending at the same point. Look carefully at each body panel. Look for signs of body repairs and overspray. Open every door as well as the boot and bonnet. Always examine bodywork in good light and never look at a car in the rain or if it is wet.…

HPI Checks

How can I check to see if a car has ever had a major insurance claim or if there is an outstanding ISA agreement on it? The HPi check is a national vehicle database run by Transunion - the same people that publish the Auto Dealers Digests. It will tell you whether there are any outstanding Instalment Sale Agreements on the car; whether the car has ever had a major insurance claim; been written off; been scrapped; or been stolen; or stolen and recovered. It also logs progressive/sequential dealer inquires where mileages are noted. It will confirm that the engine, chassis and registration numbers are correct as well as the year of first registration. The cost of this check is about R 180 (at time of writing) and available through the AA or throughwww.transunion.co.za Regardless of how certain I am of a good buy, I still do this…

Finance

Before the National Credit Act in June 2007, almost 85% of all cars were financed. The NCA changed that dramatically. For the first six months of 2007 the figures reversed themselves with almost 85% of cars sold being for cash. That figure is slowly changing as finance houses and the public are becoming accustomed to the NCA. The big difference now is that your affordability is based on disposable income, whereas before it was based on your gross salary. There is a far greater focus on responsible lending. All the finance companies, with the possible exception of MFC, have seen a huge downturn in sales since June 2007. The first thing to note when you apply for finance is that you will be required to bring the following with you:Your Identity Book (A copy must be verified at the dealers)Your valid Drivers LicenseProof of Income (Pay slip…

FICA, FAIS AND THE NCA

Here is a brief overview of some of the new legislation and how it affects buyers and sellers alike. There were three acts promulgated in parliament during 2007. FICA (Financial Intelligence Centre Act) FAIS (Financial Advisory and Intermediate Services Act ) NCA (National Credit Act ) What is the difference between these acts? FICA - Fica is about protection against money laundering and tax evasion in SA FAIS - Is about consumer protection on insurance products and to enhance integrity of that segment of the insurance industry. NCA - Is about consumer protection in respect of finance agreements and to make credit available to all South Africans --------------------------------------------------------------------------------------------------------------------------------- FICA - Money laundering in South Africa is estimated to be between R20 billion and R85 billion per annum. FICA provides for the establishment of 2 independent state bodies: Money Laundering Advisory Council Finance Intelligence Centre The most important…
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