Get the full picture: hidden costs of trading in your car
Trading in your car is a convenient way to get your hands on a shinier, newer model. However, sales people often put too much focus on the most affordable monthly installment, leaving you to budget for all those hidden extras you may not have considered. Before you lose your heart on your dream car, run through this list of common expenses to help you see the full picture and make a smart buy.
Car insurance
The fact that you need car insurance might not come as a surprise but what it will cost could be. The type of car you buy is a big determining factor – the retail price, the costs of parts and its safety track record – plus your driver profile. The easiest way to know what you’re in for is to get an accurate market value of the car you are intending to buy.
Cost of car parts
If your new trade-in is still covered by a service or maintenance plan, then great. If not, you might want to consider these stats. At least 70% of Santam’s vehicle claims are related to motor vehicle crashes so there is always a chance that you might have to repair a fender, lights or wheel rims at some point – known as ‘crash parts’. According to the Kinsey Report*, the cost of crash parts have gone up considerably in 2016. So if you plan on funding parts out of your own pocket, call around now to get an idea of what these ‘big ticket’ parts (light assemblies‚ fenders‚ windscreens‚ doors‚ bonnets‚ grilles‚ etc.) will cost you.
Running costs
Did you know that South Africans spend more of their income on petrol than any other country in the world (3.71%)? It’s expensive to keep a car on the road, with things like new tyres, servicing, e-toll fees and cleaning feeling like a never-ending drain on your wallet. Your running costs could end up being just as much as your monthly instalment. If, for example, it’s R4 000/m you should keep aside another R4 000 for fuel and any unforeseen maintenance costs.
On the road fees
‘On the road fees’ refer to the charge that will be added to your final bill by the dealership to cover their costs for new licence plates, registration fees, valet, servicing the car, etc.
Preparing the car you are selling
Although this is a once-off fee, you also have to bear in mind what it will cost you to get your old car ready for a sale. It’s up to you whether you want to repair dents and nicks and have it professionally deep cleaned but it would certainly make your car a more attractive buy.
We hope that these tips have helped you to crunch the numbers and make a well-informed decision about your trade-in car. Visit our car advice page for more useful tips.