The automobile industry has been experiencing a decline in sales in the past 2 months. According to the National Association of Automobile Manufacturers of South Africa (Naamsa), domestic vehicle sales contracted by 3.1 % in March, bringing the number to 47 718 units sold compared to the 49 230 sold last March.
Economic factors, such as interest rates and vehicle price trends, are some of the reasons for this decline, says Faisal Mkhize, managing executive at Absa Vehicle and Asset Finance.
“Interest rates and vehicle price trends play a role, which may impact levels of confidence to buy a vehicle despite the fact that consumers might be in a relatively strong financial position,” says Mkhize.
Personal circumstances such as an expanding family and retiring also play a role in the decision to purchase, as well as the condition and lifespan of the current vehicle.
Mkhize says you should consider a vehicle and vehicle finance deal that are in line with your financial position.
This week Justmoney discovers the best times to buy a car in South Africa, especially when you are on a budget.
According to Warren Kopelowitz, CEO at SA Money Saver, in terms of getting value for money, the best time to buy a car is usually October, November, and December.
“Dealerships usually have sales during this period to help them meet their annual target,” says Kopelowitz.
He also added that purchasing a vehicle in January means you might pay a little more for your vehicle, but your car falls into the next year – making its value slightly stronger.
Another time to buy a car is when car manufacturers launch a new model. Car dealers always drop the prices of old models when a new model is about be launched. Their aim is to make space for the new car.
Launch times are usually at the beginning of the second quarter of the year until October. Ford and Land Rover are some of the brands that are set to launch new wheels in the next quarter, so be on the lookout.
You can also shop on Black Friday when car dealers offer great specials. You can end up paying half of the original price. Black Friday takes place in November. A good idea is to start saving now so that you can have new wheels to take you into the festive season.
Finally, the last week of the end of the year is the best time to visit a car dealer. This also spills over to the first week of the year when car sales are slow. However, be careful because dealers are still hopeful since this is the beginning of the month and some might be unwilling to negotiate.
Mondays and the end of the season have also been cited as the best times to save when purchasing a car.
Kopelowitz gave the following advice if you want to buy a car on a budget.
- Buy according to your pocket.
- Your car is not an appreciating asset and will lose value quickly. Do not think of it as an investment.
- Shop around and test drive. Don’t purchase the first vehicle you see. There may be a similar vehicle at a nearby dealership at a better price.
- Consider the value of the car as well as the cost of spare parts and services. Consider whether the spare parts and replacement tyres easily available in your area.
- Look at the fuel consumption and insurance rates of the car you would like to purchase. Can you afford the monthly repayments, the insurance, and fuel?
- Put as much down as you can for a deposit – this will help decrease the monthly repayments, interest, and overall costs associated with your new vehicle.
Justmoney can help you apply for a car loan. If you want to apply click here.