Want a new car? Here’s how you can get it done

Cash or finance. The choice is yours. Picture: Supplied Understanding all the options available is critical to ensuring long-term financial wellness when finally buying that dream car.

A cash offer remains the most straightforward path to ownership. A cash transaction is also less complex, ensuring immediate and full ownership of the vehicle. “While often feasible in the pre-owned market, the higher price point of new cars makes a cash purchase less attainable for most buyers.” “Furthermore, it can significantly impact personal financial liquidity as well as reduce monthly interest income for those with invested savings,” says Brandon Cohen, Chairperson of theNational Automobile Dealers’ Association (NADA).

In this scenario, the buyer secures a loan directly from the bank before visiting a dealership. This approach provides the peace of mind that comes with knowing the precise spending allowance. It also eliminates the risk of a finance application being declined at the point of sale.

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It does, however, require a level of financial expertise and time that most car buyers, particularly first-time buyers, might not have. “Most buyers may find it taxing to approach multiple institutions individually to compare offers, potentially missing out on more competitive rates,” says Cohen. Most South Africans opt for finance arranged through the dealership’s Finance and Insurance (F&I) manager.

This person serves as a concierge between the buyer and multiple lenders. They can pull quotes from multiple banks simultaneously, allowing the buyer to easily compare interest rates and deal structures, including fixed vs. linked rates, balloon payments, and guaranteed future value (GFV) deals.

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