Vehicle Finance: Tips and Advice

[AirWolf]

Good day all

I'm thinking about selling my Citi Golf and getting a good second hand car in the around R140k from a dealer. The Citi Golf was purchase brand new last year August for R82k cash. Current have just over 7000kms on the clock.

I'm looking at a minimum trade-in of R60k. So will need to finance the balance of R80k.

I haven't used finance before, so I need some advice. Who are the better finance people to deal with, and what kind of interest rates would I be looking at?

Edit: My boss seems to think that the financial institutions pay the dealers a fee, and people should negotiate with the dealer to reduce the vehicle price by that amount. Not sure how true that is, and if the dealer would be willing to admit this if it was true.

 

[2CentsWorth]

First off, good choice getting rid of the rubbish.

Secondly, beforee taking internet advice (which you should never do because contrary to popular belief, not everyone is a car specialist or a lawyer online ), you should probably decide what sort of second-hand car you're thinking about.

Basically, a mini checklist:
Mileage (Low ~ medium)
Marque (German mid range, Japanese Entry/Mid, etc)
Fuel Economy
Parts availability
Balance of Motorplan/Warranty
Fitted extras (e.g aircon, etc)
Cost of the next service (Cambelt services are extremely costly on many cars!)

Given your trade in value and the current state of the car sales market you have got a lot of room to negotiate. Shop around and don't take the first deal you see.

One more thing, phone around and see which dealerships are willing to negotiate interest rates. You may be surprised how some dealershps will bring that interest rate right down on a newer or even new model.

 

[AirWolf]

The car I'm keen on (haven't made a final decision yet) is a 2005 2.4 Honda Accord with 101000kms on the clock. So it would be out of warranty. Interesting about the cambelt service - hadn't really thought about that.

 

[Pornolio]

2Cents covered the most important aspects in his post.

All I can say is shop around. When I was shopping around recently, I phoned up a few institutions and I must say 90 % of them werent even willing to finance my car at prime -1 %.

In the end much to my surprise I discovered the company I work for, has a special deal / agreement with bankfin, and I ended up buying my car @ prime -2.5 %. So shopping / asking around can wield great results. As vrot as the market is, there are still people trying to win business from you.

Also which Accord did you have in mind ? I had the Executive model... awsome car. Saved my life when I had my crash. Every single safety feature kicked in when it needed to. Only bad thing I can think of with the Honda Accords are the cost of parts, and also the VSA tend to eats brake pads in regular town driving. If you are outside your motorplan period, phone around and get a rough indication of what services will cost you.

 

[Slootvreter]

Also which Accord did you have in mind ? I had the Executive model... awsome car. Saved my life when I had my crash. Every single safety feature kicked in when it needed to. Only bad thing I can think of with the Honda Accords are the cost of parts, and also the VSA tend to eats brake pads in regular town driving. If you are outside your motorplan period, phone around and get a rough indication of what services will cost you.

I don't see the point of servicing a car at Orbit/Honda if it's out of warranty. Also, brake pads and 'consumables' like that can be bought at Midas or similar spares shops and fitted at Hi-Q or somewhere.

 

[dj_jyno]

2005 2.4 Honda Accord...Interesting about the cambelt service - hadn't really thought about that.

As far as I know, the Accord uses chain-driven cams, so you don't have to replace it every 120 000km.

 

[Pornolio]

I don't see the point of servicing a car at Orbit/Honda if it's out of warranty. Also, brake pads and 'consumables' like that can be bought at Midas or similar spares shops and fitted at Hi-Q or somewhere.

Valid point... BUT there are certain parts in a engine I just wont bother replacing with pirate parts. Brake pads or normal consumable items like airfilters / oil filters / plugs are fine though.

 

[PetrolHead]

Hi

Dealers today are required by law to be FICA and Fias Compliant.

Call any of our customers (website below) and ask to speak to their F&I sales person.

They will give you the information you need and you can rest assured it will be proffesional and sound.

Good luck.

 

[Bondizzo]

You currently have a paid off car, why do you want to go into debt ?

 

[AirWolf]

You currently have a paid off car, why do you want to go into debt ?

Have thought about that.

However, the Citi Golf just isn't roomy enough, and my dream car for the past 10 years or so has been the Accord. So I thought I'd kill 2 birds with one stone.

With the recession, now would be a good time to buy to get a good rate and possibly fix it. I have a good financial record, and will in all likelihood finish the payments before the 54 months are up.

 

[appels]

i hear you on the dream car and all. if you want to check what your payment is going to be a month check this site out
http://www.standardbank.co.za/SBIC/Frontdoor_06_01/0,2378,7264092_7270684_0,00.html.

you are going to look at R2206 a month. if you had a previous car you bought and payed of using finance you could have negotiated a better interest rate.

 

[AirWolf]

Would it be better to go for a fixed rate or a prime linked one?

 

[spiderz]

What interest rates are they offering you? and whom have you talked to?

 

[AirWolf]

Only submitted the online application for Wesbank so far. Still waiting for a response.

Will do more apps tomorrow.

 

[adamr]

i would personally go for a higher purchase agreement than a lease with residual. In these uncertain times rather get a fixed rate. And remember a bank will not finance more than retail on a car if bought from a private person. P2P finance has been the best finance house i have dealt with, buying or selling

 

[flarkit]

Just 1 more thing... as lovely as the Accord is, a 2005 model with 101,000km sounds like it did lots of driving - in the order of 33,000+ km per year. That's quite a bit, sounds like the Pretoria-to-Jhb daily commute of 130km/day. I don't think I'd go for a car with that many kilos on it, which is out of warranty, unless one has a very good backup plan for when things break, like bearings, seals, electronics etc.

As much as I also respect the Accord, it's not a cheap car to repair.

 

[2CentsWorth]

Would it be better to go for a fixed rate or a prime linked one?

Depends on which side of the recession you think we're on. If we're genuinely on a road to recovery, then the reserve bank may well return to the policy of inflation targeting by the end of the year, meaning the cycle of interest rate cuts will probably slow down and stop with perhaps a few hikes next year. If you think the recovery will be very slow and drawn out, then there will still be a few more cuts to try and stimulate some growth. Your guess is probably as good as anyone else's - even seasoned economists are not sure what will happen.

 

[2CentsWorth]

Just 1 more thing... as lovely as the Accord is, a 2005 model with 101,000km sounds like it did lots of driving - in the order of 33,000+ km per year. That's quite a bit, sounds like the Pretoria-to-Jhb daily commute of 130km/day. I don't think I'd go for a car with that many kilos on it, which is out of warranty, unless one has a very good backup plan for when things break, like bearings, seals, electronics etc.

As much as I also respect the Accord, it's not a cheap car to repair.

Yeah agreed - price wise there are not many accords for under R150k though.

Found these:

2006 Honda Accord 2.4 Type-S Silver 59 000 km, Petrol, Sedan, 5 Doors, Manual, Air conditioning, CD, Central locking, Electric mirrors, Electric windows, Foglights, Full service history, Leather interior. Bal. of honda s/plan. Price: R149950

2006 HONDA ACCORD 2.4 VTEC Silver 67 000 km, Petrol, Sedan, 4 Doors, Stereo, Immac. Cond. Alarm, FSH, Air con, CD, PS, Immobilser, Central Locking, E/Windows, Alloys.R 148000

2007 Honda Accord 2,4 Executive A/T 95 000 km, Air conditioning, CD, Central doorlocks, Electric windows, Full service history, Heated seats, Leather interior, Sunroof.
R145995

That's a lot of mileage in under 2 years

 

[flarkit]

Of those 3, I'd have a serious look at the first one (take it to a trusted mechanic and the A/A), since it has the lowest kilos with a service plan

 

[JK8]

Pay cash for your accessories!