Heels on Wheels

It is very seldom that a car can be regarded as an asset. In fact, there are very few vehicles that will grow in value after you purchase them, unless you are in the fortunate position to own a rare, collectors model. Quite simply put, a car should be considered a liability on your list of assets and liabilities, and treated as such. It is not an investment and is not going to increase in value over time.

A surprisingly high number of subscribers and other clients have approached us to assist with a trade-in or to purchase their vehicles and when we request a settlement value on their vehicle, the outstanding balance exceeds the actual value of the car, sometimes by a substantial amount.  Now this is clearly not a favorable position to be in for many reasons.

Once we have settled the debt on the vehicle, there will be no deposit to put down on the next purchase. In fact, you will still owe money to the bank, on a car that you no longer even own! It may also affect the insurance payout, should you be in an accident.

The only way that we can and have helped with this scenario is to replace the vehicle with one that we ourselves have obtained at a price way below the trade-in value, as we will be able to ‘write-back’ the loss from the existing vehicle against the ‘cheaply’ acquired replacement. We are able to do this because the banks know the true value of vehicles.

But this clearly limits your options for a replacement vehicle as there are not many opportunities for us to source cars at prices way below its trade-in value and you may not get the exact vehicle you are looking for as your options are limited by what we or any other dealer can find.

So this months tip is to advise you to shop carefully whenever you buy a car. Make sure that you are paying the proper price for it and not above retail price. If a car is particularly popular, such as some of the smaller sedan’s are at the moment, it is very common for a dealer to sell it to you above recommended retail because they know they will easily find a buyer, so they load the price!

However, the most common mistake is to make modifications or to add a whole lot of extra’s to the vehicle when or after you buy it. This is a sure-fire way to lose money. Unless these extra’s are vital to the purpose for which you bought the car, try an avoid adding things on, as the do not add to the actual monetary value of the vehicle when you come to sell it or trade it in.  The lending bank will only look at the Mead & McGrouther ‘book’ value of that particular make and model of car and, in most instances, they ignore the fancy extra’s you have added.

Be careful when buying a car on a residual basis. Make sure you fully understand the implications of this method of purchase before you sign the contract. It is often very tempting to buy on this basis as your monthly installments are attractive enough for you to afford that nice car you’ve always wanted, but then you may be locked into a long term agreement that doesn’t work in your favour. More of this in a later newsletter.   

If you have any concerns about the price you are being asked to pay or that modification you want to do to your vehicle and you’re unsure what it will do the value, why not drop Autofusion a line to allay your fear?

Remember, we can help you with:

Buying a new vehicle?
Call Autofusion before you commit to the deal. We can negotiate the following on your behalf:
1.    The best price for your trade-in
2.    Maximum discount on your new vehicle
3.    The best finance options

Selling your vehicle?
Contact us for a price on your car, bakkie or SUV.

Re-financing
Do you require cash flow urgently? If you have equity in your currently financed or paid up vehicle I can assist in this regard.

Emigrating?
Call Autofusion and we will give you a forward cover on your vehicle so that you have usage up until you leave. We will then pay for and collect the vehicle.

Financial problems?
Contact us before the bank wants to repossess the vehicle. We can then assist you to dispose of the vehicle at a good price before the bank takes legal action and blacklists you.

Buying a vehicle privately?
We can assist you with all the administrative details as follows.
1.    Arranging finance
2.    Roadworthy
3.    Licence and registration
Unfortunately, this service is only available in the Cape Town area at present.

Don’t forget the Finders Fee of R500 on every successful deal you bring to us.  Of course, if it’s your own car, the R500 will be built into the deal we negotiate for you…

Thank you for your continued support. We are always pleased when we able to assist InspiringWomen subscribers with their automobile queries or transactions.

So, before you sign for that next car, give me a call, Shaun, at 083 230 0757 or send me an email at shaun@autofusion.co.za