It’s hard resisting a bargain buy, whether it’s a pair of slingbacks or a zippy hatchback. And as the credit crunch tightens its grip and the demand for cars decreases, the market is being flooded with fantastic deals. But should you take advantage of the bargains out there or should you practise caution in these uncertain times?
Buying a new car is always expensive. What’s more, during a credit crisis the number-one rule is to decrease – not increase – your debt. However, now is a good time to buy a new car given the extremely competitive trading environment, as well as the incentives and special deals available to buyers.
There’s an oversupply of vehicles because of the economic situation in South Africa and the drop in vehicle sales. It's a good time to buy if you can afford it and if your current car is no longer reliable. But carefully consider your personal financial circumstances and overall disposable income first.
› SA diva takes us for a ride
› Care for your car, save money
Do The Maths
Before taking up any deals you should look at your personal finances carefully. Is your current car still in good condition? Is it paid off? How much money have you spent on it recently and how much are you likely to spend in the near future?
Also balance the outstanding amount on the existing loan against the market value of the trade-in. Will the deposit required on the new deal be financed from the trade-in or from personal savings? Once you’ve answered these questions, it should be easier to decide whether a new car is necessary.
There are discounted prices, cash-back deals and even buy-back deals on offer – all there to pull you into the showrooms. Right now it’s a buyers’ market as vehicle manufacturers, retailers and finance-providers offer once-in-a-lifetime deals to stimulate demand. There’s an oversupply of stock, putting strain on the dealers’ cash flow, so consumers are in a good position to negotiate good buys.