Buying And Selling A Car In South Africa

Time to go car shopping

One of the first things I noticed about Joburg is how many car dealerships there are. People are obsessed with their cars here and it shows. There’s a huge supply of used cars as people here have money and want to show off their life in a new car. This is likely one of the reasons why used cars depreciate so much faster than in America. In terms of buying a car, I can’t compare it to anything since I never owned a car in America but I can’t imagine it would be too different. Hit up Autotrader, find some cars you like, call up the dealership, visit dealership, test drive, decide. Good thing about the dealerships here is that they all carry many different makes and models so even if you had your mind set on one type of car, seeing another car in person may change your opinion.

My advice for expats that are here short term (1-3 years), is to not buy a new car. The depreciation is so high that you’ll lose half of the car’s value by the time you’re ready to leave. Unless you have so much cash you don’t know what to do with, visit one of the hundred used car dealerships in Randburg or Fourways. There are deals to be had and make sure to bargain.

Now as for me, I grew up in a suburb where there was a high concentration of kids driving these luxury vehicles to school every day. For some reason, I always had a thing for BMWs and was always jealous of my friends who had them. Now that I finally make a little money, it’s time to make that childhood fantasy happen and buy my own. So I was in the market for a BMW 3 series sedan automatic, 2009 and onwards. An Audi A4 or Mercedes C class wouldn’t have been met with any resistance either but of all the german luxury cars, BMWs are noticeably cheaper than their audi and Mercedes counterparts, especially the 3 series. After doing some research, I called up some dealerships and paid them visits. Here are the cars I saw!

One of the good things about being an expat is car salesmen immediately think you have mad cash, or at least company support, that they will give you very good customer service.

MyCars.co.za

To the great suggestion of a coworker, this site is an online car auction website for private sellers and bank repossessed cars. You bid on the car just like you would buy something on ebay and there are DEALS to be had here. Cars consistently go for under market value and inventory is regularly refreshed.

BMW Financial services also lists on here and they actually listed about 30 2011 3 series BMWs that had just come off a 2 year lease. You can see that the 229,700R price tag on the picture but that just tells you what the payment left on the car is, not how much it costs. By the time the auctions ended, these cars went for 185000-195000R! That’s like 19k USD for a 2 year old BMW with barely any mileage on it. Again, another reason for expats to avoid buying new cars, you’re just gonna lose so much on it when you’re ready to get rid of it.

Car Financing

Once you’ve decided on your dream car, and don’t want to pay in straight cash, prepare for the world of getting car financing. The prime rate is 8.5% here. That means most people get financed at above prime and 10-12% is average! Ridiculously high compared to back home. However, I was lucky and my company could provide 6% financing which after telling car salesmen, they were awestruck and jealous. For expats, your car loan will be over a period of time equal to your visa. All other vital details can be sought out at Perusvippi. Thankfully, mine is a 5 year work visa and I ended up getting financing over 60 months. All the big banks give car loans: Nedbank, Absa, Standard Bank, Investec, Firstrand etc. When you’re ready to purchase, you’ll just give your bank the intent to purchase letter from the dealership, the bank will want you to get car insurance beforehand so once that is taken care of, it is pretty smooth sailing. If you’re buying from a private seller, you must be the second buyer of the car in order to get car financing otherwise, you’ll have to pay a significant fee to appraise the car in order to get car financing.

Car Insurance
Car insurance is not cheap here. It is also very much required by law, but also something you’ll want to have with the way people drive here, ESPECIALLY those crazy taxis. If you get hit by one of those, you best believe they won’t have any insurance to help you. The only experience I had with car insurance stateside were the hilarious commercials, especially from Geico and Allstate’s mayhem but I’d say the experience of getting insured is quite easy here. There are many companies but the big ones are all banks, Outsurance, Dial Direct, Hollard are some good places to start.

As a word of advice to expats, make sure you lie off your ass when you request a quote. Because you have no driving history in SA, your premium will be calculated off whatever you tell them. If I was honest and told these guys I lived in NYC so I never owned a car, haven’t driven regularly in eight years and certainly have never had car insurance, my premium would have been through the roof. Instead, I told them I’ve had my license since 2002 (which is true) and I’ve been driving regularly since without any accident history.

After calling all these guys up, each company gave me very different quotes. One of the banks gave me 1000R/month, Outsurance quoted me 1900R (wtf?), Dial Direct gave me 850R, and Hollard gave 635R. Hollard is the best option as their plans are based on how much you drive and because I don’t drive much, I get a much favorable rate. Once you agree to a quote, they will pretty much insure you right away. Again, these quotes were all after I lied my face off about my car history. If you’re of the much more morally sound type of person than I and refuse to lie, be prepared to pay 50% than whatever I got quoted.

Finally, My new car

At long last, what did I buy? Call me childish if you will, but sticking to my high school dreams, I’ve purchased a 2009 BMW 320d Sport pack (with 80km on the clock). I ended up buying this after winning an auction on mycars.co.za and bought this from a private seller. After getting the AA report, everything checked out except one of the tires needed replacing. I ended up paying 150,000R for this baby which I think is a huge steal. Because of the diesel engine, this car really flies off a red light. Who knows? Maybe I’ll actually enjoy driving now!