If you are thinking about downgrading your car to save money, you need to properly think it through before you make a final decision. Picture: Freepik
With the cost of living on the rise, along with high interest rates and inflation, saving money is a priority for many South African households.
If you are thinking about downgrading your large family car for a smaller one to save, there are a few key points to consider before you make a final decision.
When you downgrade your car, your goal is to find a car that fits your lifestyle, lowers your monthly budget and has great resale value, but this could also mean sacrifices in car performance and comfort.
Barend Smit, marketing director of MotorHappy, a supplier of motor management solutions, said that the first thing you need to do is to assess your needs. This mean that you need to think about your typical passengers, cargo requirements, and intended use.
“A smaller car might mean sacrificing space, so ensure it accommodates your daily necessities without compromising comfort,” Smit said.
Make sure that the smaller car that you are thinking about switching to maintains crucial safety elements to protect you and your passengers.
Consider parking and manoeuvrability in urban areas, as well as resale value and overall cost. According to Smit, downgrading should ideally offer both immediate savings and long-term value.
Fuel efficiency also has a huge role in the choice to downgrade your car. With the current advances in automotive hybrid and electric technologies, consider switching to a PHEV or EV – it may save a lot of money in fuel in the long run.
Maintenance is the second biggest cost of ownership after fuel costs.
Smit said: “Premium car brands generally come with higher maintenance costs, both in parts and labour. Car models with low sale numbers generally require longer waiting times to source parts and could have higher labour costs for replacement and repairs.”
Choosing a commonly available car model usually means that there will be reduced long-term ownership costs.
Before if you buy a new car, it is crucial that you investigate the car manufacturer’s recommendations around maintenance and services. A Service Plan or Maintenance Plan offers great value for money, with easy monthly payments that allow for better budgeting.
A Service Plan covers recommended car services by an approved facility for a specific term or kilometres, whichever comes first. A Maintenance Plan, on the other hand, is a level up from a service plan, as it includes wear and tear on items such as shock absorbers, brake pads and wiper blades.
While researching a potential new car, take some time to analyse your lifestyle needs and how they may have changed since the last time you bought a car.
If kids have moved away, do you still need a large class 3-row SUV? If you are city driving 99% of the time, does it make sense to drive an all-wheel drive or 4X4?
Another important factor that people need to consider is whether to buy a new or previously loved car. The used car market can provide the ultimate vehicle to downsize to, with all the perks you need and at a great price, compared to a brand-new vehicle from a dealership.
Smit warned people that when it comes to trading in a financed car, they need to be wary of the timing.
“Consider trading your car when the vehicle's value is either equal to or more than the amount you owe the bank. This is called the break-even point, usually around halfway through a 72-month loan,” Smit said.
IOL Motoring