Avoid buyer’s remorse: navigating the car-buying maze  

Buying a car, new or used, cash or on credit, can wreck your finances if not done properly. It may look like a good deal at first, but hidden defects and financing traps can surface long after you’ve driven off the lot.

South Africans buy roughly 80% of new vehicles on credit, and the National Credit Regulator’s data shows vehicle finance is among the fastest-growing categories of household debt. With the prime rate at 10.25% and disposable incomes squeezed, the cost of getting a deal wrong has rarely been higher.

“People must be realistic about what they can afford. You should not expect to buy a sports utility vehicle when you can [only] afford an entry-level car,” Alex-Jay Hendricks, who manages the George branch of Motus-owned Auto Pedigree, tells Currency.

If you’ve got the cash, life is simpler. Paying upfront means no debt or interest. Trading in or selling to a dealer like WeBuyCars can also bring the price down, though private sales usually fetch more – at the cost of dealing with scammers or potential hijackers.

The balloon sting

For most South Africans, though, buying a car means a loan with a maximum term of eight years, or 96 months. That’s a long time to pay off something that’s losing value.

Another option is a balloon payment. This pushes as much as 35% of the car’s value to the end of the loan, lowering monthly instalments. The catch: those lower payments can tempt you into buying a car you can’t afford. At the end of the term, you’re left with a lump sum to settle or refinance.

A balloon can help short-term cash flow, but it’s not free money. If the car depreciates faster than expected, you could owe more than it’s worth. If you can’t settle, you may need to refinance – often at a higher interest rate. In the end, you’ll usually pay more than on a standard loan.

Before signing anything, check your credit score and compare interest rates. Dealers often offer in-house finance, but shopping around can save you a significant amount over time.

Leasing is another option, though better suited to businesses. A newer route is guaranteed future value (GFV). Marc Myburgh, pre-owned sales executive at CFAO Mobility West Rand Toyota, says he is seeing more buyers go this way. You finance the car over two to three years, stick to a mileage limit (usually about 20,000km a year), and the dealer guarantees a future trade-in value. It works if you upgrade regularly, don’t drive long distances, and look after the car.

Do your homework first

“One of the biggest mistakes buyers make is not doing enough research,” the WestVaal Motor Group warns consumers on its website.

Start with your budget – not just what you can borrow, but what you can realistically afford. Factor in everything: instalments, insurance, fuel, maintenance, registration, and potential interest rate increases. Several car finance calculators are available online to help you with your planning.

Don’t be fooled by a low monthly instalment. It could mean a longer loan term or a balloon waiting at the end. Look at the actual cost of the car.

Watch for the financial traps

Just because the bank says yes doesn’t mean you should. Rates can rise, expenses creep up, and that “affordable” car starts stretching the budget. Add-ons are the next layer – extended warranties, service plans and insurance products bundled into deals and marked up. And depreciation is the quiet cost: new cars lose value quickly in the first couple of years, and selling too soon can leave you owing more than the car is worth.

Used cars: value with caveats

Hendricks says the first step is to research the dealership: its reputation, how it handles warranties, and whether it’s transparent about vehicle condition. Demo models – cars dealerships use for test drives or display – are usually only a few months old, with low mileage and a discount. Check reviews on HelloPeter or Google, but don’t rely on them alone.

Buying privately demands extra care. Make sure the car has passed a roadworthy test, check the service history, and arrange an independent inspection. Several firms specialise in this, including Dekra, the Automobile Association, Car Inspect, and Inspectify (a WeBuyCars service). Tools like vehicle registration databases or TransUnion reports help dig deeper into ownership.

Always verify the vehicle identification number (VIN) and check whether the car has been in an accident, has outstanding finance, or has had its mileage tampered with. TransUnion does this, and the AA is a helpful source of information.

Test, negotiate, walk away

A quick spin around the block isn’t enough. Listen carefully, test the brakes, try different road conditions – highways, traffic and rough surfaces. WesBank notes this is often when hidden issues reveal themselves.

Price is almost always negotiable. Do your research, point out flaws, and be prepared to walk away. As Hendricks advises, if the deal doesn’t feel right, don’t force it. If you feel rushed, confused or financially stretched, that’s your cue to pause.

After the purchase

The work isn’t over once you leave the dealership. Comprehensive insurance is essential. Service the car regularly, fix issues early, keep a full service history, and protect it from the elements. Even small habits – not eating or smoking in the car – help preserve resale value, which varies sharply by brand, mileage and demand.

For most buyers, the discipline isn’t in choosing the right car. It’s in walking away from the wrong one. With repossession volumes climbing and lenders less forgiving than they were two years ago, that discipline is doing more work than ever.

_{Top image: Rawpixel/Currency collage.}