Business

Siki Mgabadeli
12 minute read
26 Nov 2016
10:02 am

Talking cars – things you need to consider before buying or selling

Siki Mgabadeli

Be very wary of specials; read the fine print – Warren Tucker – The Car Guy.

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SIKI MGABADELI:  You might be looking at getting new wheels for the new year. At that time a lot of people try to register their cars in January so that they get the new-year thing. I’m going to Warren Tucker, The Car Guy, to explain that to me. Or you might just be wondering how to pick the best car for you. I had a friend on Facebook saying they are moving into the big city and they are not sure what sort of run-around car they should be getting. They wanted to get rid of their one car that they’d been using out on the farms. What is the best car for them?

Or maybe you want to trade in your car, and you want to get the best value for it. You want to figure out if you should get a new vehicle, trade in your car, get a second-hand car.

Always great to have you with us, Warren. What sort of questions do you get at this time of the year?

WARREN TUCKER:  Well, a lot is because people are unsure. Do they buy vehicles now, do they wait? A lot of the specials – today is Black Friday.

SIKI MGABADELI:  Yeah, Were there any car specials?

WARREN TUCKER:  There were car specials everywhere. But, as I always say, be very wary when reading these specials. Read the fine print. Always read the fine print. Remember, the salesman’s job is to get you in the door and to whisper sweet nothings in your ear and show you this vehicle, and just work on you and get you in that car.

There is a bit of a culture in South Africa. When I was still busy with the auctions and when I was buying from auctions quite a lot, people would buy in November and December, only to be repo’d in February and March.

SIKI MGABADELI:  Because why? They are spending all their money in December?

WARREN TUCKER:  It’s flash. I was to show this convertible off, just to have a lovely November and December. January, February, March. And then the vehicle is repossessed and the vehicle goes on auction. It’s a sort of a trend in South Africa. I don’t know why you would want to do that.

SIKI MGABADELI:  I wouldn’t do it, but we know why.

WARREN TUCKER:  Yes. And also the manufacturers make it so tempting because you get specials on vehicles – R100 000 towards the purchase of your new BMW – those kind of specials. People definitely look at these messages, these SMSes. Go to the dealership, sit in the car, that new leather smell, the colour, there is stock available, and the guy says, “We can have this car for you tomorrow” – that kind of thing.

SIKI MGABADELI:  With a ribbon.

WARREN TUCKER:  There we go. With the ribbon on it.

WARREN TUCKER:  Ja, you’ve got that consumer culture going on. A lot of people, especially at this time of the year, might have some cash, they might want to change a vehicle.

What you mentioned earlier is where people are buying a car in December and getting it registered in January. What happens sometimes with the dealers is quite a few dealers have been caught out with this. A vehicle would come from the factory and it would arrive on the floor. Remember, once the sale agreement is signed, that vehicle’s motor plan and warranty and the rest of it is activated. Now, what tends to happen is that, for the dealer to achieve a discount, they will then activate this. So they’ll say: “We sold so many units, so we are getting the rebate.” But that vehicle is sitting on the floor. So you come along and they say to you this vehicle is a 2016 – and it’s actually maybe a December 2015 or November 2015. The vehicle’s service plan and warranty have been active for six months before the vehicle is sold. So that’s illegal. The dealerships are getting into trouble for that.

What they do now is, when the vehicle is sold, the vehicle is registered then and there. So a lot of guys might hold back. Some of the gentlemen who are paying cash for vehicles and are running around with R940 000 for the new Mustangs – I’m saying this because there’s a gentleman that we are chatting to at the moment who wants one – they will purchase the vehicle and register it in January. So the VIN number will show that that car was produced in 2016 and it was registered in 2017.

SIKI MGABADELI:  What’s the benefit there?

WARREN TUCKER:  Well, you could pick up a couple of grand in terms of resale value because, remember, the car is only going to be registered next year. Remember cars go up every year, the prices of vehicles go up – the value of the vehicle will be as at the 2017 value, so you might pick up some money, you might pick up a couple of thousand rand here and there. And that is obviously why people do that.

But remember, your warranties and your service plans and everything will be activated now. So you will see on the system that the vehicle was sold in 2016 and the warranties and stuff are active then.

SIKI MGABADELI:  Let’s talk a little then about deciding on getting the car. What are the things you need to think about – where you live and that kind of stuff?

WARREN TUCKER:  Again, we use this example. Say you drive a Mini and you like the look of that vehicle. There was an emotional attachment to the vehicle before you walked into the dealership. So chances are you saw an advert with the car in it, and you thought, that’s a nice-looking car, let me go through and have a look.

Now, you are buying the vehicle because, first of all, you like the product, you are attracted to the product. Sometimes there’s a deal available on the product and people will walk into a dealership normally and say, okay, well, I like this car, let’s talk about this vehicle.

Then the salesman’s job is to up-sale, to try and get you to take the navigation, to take all of the extras, or put you into a vehicle that has already got the extras.

So a lot of the time, if we look at the people who are moving from the farms into the big city, let’s say they’ve got a Toyota Hilux and they are coming to Johannesburg – for me I don’t see why they would change the vehicle unless it’s a petrol. If it’s a diesel I’d keep it, drive it around here. This is a concrete jungle, after all.

SIKI MGABADELI:  And the diesel versus petrol? I know nothing about cars; I just drive one.

WARREN TUCKER:  You get the diesel lovers out there and you get the petrol lovers. This is purely my point of view. Your petrol car will always outlast your diesel vehicle as far as I’m concerned. Your diesel-vehicle sale intervals are shorter. The wear and tear on a diesel vehicle is higher. At certain mileages your diesel is going to require massive maintenance because your turbos will go.

I’m not saying that if you had a turbo petrol car it wouldn’t, but your petrol is a cleaner fuel. The way a petrol engine operates versus a diesel engine is quite different. Your diesel engines make massive amounts of torque and that’s why they put them into bakkies, into your Range Rovers, into your big SUVs, because they can move that body from point A to point B.

Your petrol vehicles – the cost of petrol – guys will say yes, but in my diesel car I’m getting 1 000km on a tank. I say yes, okay. If you take it over ten years and you work out the cost of running the two vehicles, the diesel always comes out more. The diesel has more filters that need to be changed at specific periods. Like I said, its maintenance is always going to be a little higher.

SIKI MGABADELI:  We don’t look at the things, we don’t factor them into the cost of the car.

WARREN TUCKER:  Correct. When you walk into a dealer and you are buying a vehicle, a lot of people will say, okay, I need the most fuel-efficient vehicle for what it is that I do. I’m on the road all the time, I need to get from point A to point B, it needs to be comfortable. So they’ll get into a diesel car. The chances are the buyer’s got a car allowance, so every three or four years the vehicle will change and he’ll get another one. It’ll run up kilometres quite quickly, so therefore the value of the vehicle will depreciate more quickly.

Your petrol cars – if you take your smaller petrol cars – they come out today with a 1.2 turbo supercharged Polo TSI. These are quite fuel-efficient, they are quite nippy for town driving for getting from point A to point B and they are quite fuel-efficient for what it is you are getting.

So your products out there are quite competitive. You need to obviously look at what sort of warranty you are getting, what sort of service plan you are getting, what it is that you need the vehicle for. You’ve got these people who drive these massive SUVs with a 4X4 capability and these massive tyres – they’ve never ever seen dirt.

SIKI MGABADELI:  And therefore I’ve seen them in the city. So, for my friend who wants to go farm to city, besides whether its diesel or petrol, what should they think about?

WARREN TUCKER:  Well, it goes then according to the size of the family, and the needs. Are they going to go with two vehicles, what is it that they need there? They must also look at the offerings that are out there. VWs are great value-for-money packages. They need to look at their budget, obviously. Your Japanese and your Korean vehicles are great reliable vehicles. They will run till the end of time, as long as you maintain them. And with anything, maintenance is key.

SIKI MGABADELI:  And parts?

WARREN TUCKER:  Well, your Japanese vehicles, your Korean – your Hyundais, Kias, your Toyotas, your Hondas. Honda generally, and I’m taking it from the motorbike side of things because, as a rule, with the guys, a Yamaha bike is an expensive bike to buy, but the parts are really cheap. A Honda is really cheap to buy, but their parts are massively expensive when you are servicing the bike or buying parts for the bike. We take that and go back to their vehicles as well. Their cars are quite cheap to purchase; their cars are reasonable. But maintenance on them – they tend to be quite expensive.

Your Hyundai and Kia – they’ve got an industry-first 200 000km, seven-year warranty. Or your Kias have a  five-year unlimited-kilometre warranty, provided you service the vehicle at Kia and Hyundai. So again, you look at value for money there. Am I going to go that way, am I going to go with a Korean vehicle? I like the look of the vehicles.

Definitely in the market as far as I’m concerned , if we go back to the nineties, Toyota was the car. Everybody drove a Corolla, everybody had  GLI twincam, everybody in government was driving Camrys. Today they drive BMs.

SIKI MGABADELI:  They’ve moved up in the world.

WARREN TUCKER:  Toyota was the brand in the nineties and, if you look around, Kia and Hyundai, the package they offer you – currently I don’t see Toyota beating them, especially with your sedans and your hatches. Price – what you pay for is what you are getting. These Hyundais and Kias are coming fully loaded, their warranties, their service plans that they give you. Especially for a young person, somebody who is just starting out, you want something reliable. I’m not saying the Toyotas are not reliable but you want something that’s not going to break your pocket when something goes wrong.

SIKI MGABADELI:  Here’s an email that says “I’ve got a Renault and I just wanted to know whey their parts are so expensive.’ We’ve talked about that.

WARREN TUCKER:  Yes. Again, with the French vehicles, remember you’ve got an import tariff. Those parts are being imported. I always hear this – people complain that they order and they’ve got to wait two weeks because the dealers aren’t keeping parts over here. So what they are doing is they’re filling a container, they are waiting until the container is full, then they bring the container across every two or three weeks. So you’ve got to pay for the part, they order it and it comes across to South Africa. That is a complaint especially with the French vehicles – a massive, massive, massive complaint.

Remember with the German cars normally they’ll say seven days. If there is a backlog and the factory in Germany doesn’t have it, at most 14 days and the part will be here. They also look after their customers. You can order parts for really old BMWs. You are going to pay for them, they are not cheap. But you can get parts going as far back as the early nineties. Sometimes for the late eighties you’ll get parts for those vehicles.

But your French cars – it’s especially got to do with their structure on how they bring the parts into the country. They’ve worked out that that’s the best feasible option for them, and that’s fine. They’ve also pegged their vehicles within a certain market category. They are not in the same boat as your Hyundais and your Kias and the rest of it. They sit more at the same level as your Opels, your more upmarket vehicles, your Peugeot and your Renaults.

SIKI MGABADELI:  All right, we’ll leave it there. Thanks, Warren, Always a pleasure to have you with us. Warren  Tucker is The Car Guy.

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