DAVID FURLONGER: Think carefully about the car you buy, and how

Head over heart or head over heels? When you buy a car, is your decision driven by cold logic or by passion?

Some of us consider our cars as no more than a convenient means of transport. For others, it’s a love affair. They get a thrill every time they drive it. They lavish affection on it. They boast about it. They want everyone else to admire it.

They consider the ton or so of metal, rubber and wiring to be an extension of themselves.

It reminds me of the message that’s been circulating on social media. “A question for all men. If you had to choose between a wonderful wife or a really nice car, which would you choose: petrol or diesel?”

The only car that has ever had me panting is a classic Morgan sports car, from the UK. But the price, plus the fact that only a few hundred are made every year, mean that my actual purchases have all been driven by the need to shift family, dogs, bikes and everything else that comes with ordinary life.

Most of my vehicles have been bakkies — at least, I thought they were. Turns out I was wrong. Last week, the Ford Ranger double-cab 4x4 was named South Africa’s 2023 car of the year. Now, I know many double-cab owners (myself included) use their vehicle for family purposes, so it certainly qualifies as a passenger vehicle. But a car? I’m not convinced. 

Whatever your reasons for choosing a new car, the pressure to be practical, rather than romantic, is intensifying. Rising interest rates, now at their highest level since 2009, allied to inflation, a disintegrating rand and general economic malaise, are forcing consumers to think very carefully before buying. 

For some, the decision is taken out of their hands; banks are turning down more than 50% of applications for vehicle finance. Among those accepted, financial reality forces them to lower expectations. 

As a recent study confirmed, brand loyalty is declining. The badge still counts, but not as much as value for money. Consumers want predictable cost management, in the shape of longer warranties and service plans. They also want to pay off their credit debt over longer periods. 

For some, the decision is taken out of their hands; banks are turning down more than 50% of applications for vehicle finance

Even so, the desire to own can still trump the apparent lurch towards common sense. Do you really still want to be paying off your car seven years from now, through long-term credit? And what about balloon deals, that allow you to reduce monthly payments by paying the “deposit” at the end of the deal rather than at the beginning? All you’re doing is delaying the inevitable. It may be a few years down the line, but you’ll still have to cough up R100,000 cash, and possibly much more, to complete the deal and take ownership. 

Another thing to consider at the moment is whether to ask for a linked or fixed interest rate on your deal. The former fluctuates according to movement in the prime lending rate. Fixed interest rates, as the name suggests, remain unchanged throughout the contract. 

Purchasers who opted for a linked rate a year or more ago may be ruing their decision now as prime continues to climb. It’s said that what goes up, must come down. Yes, but when?

WesBank marketing head Lebogang Gaoaketse says linked customers are feeling most of the “increased pain” from rates. Monthly repayment differences may not look much but they add up.

A customer buying a R250,000 car will be paying R65 more each month than at the beginning of May. Over the duration of a deal, that customer will pay R100,000 in interest.

Gaoaketse says: “This is why we urge customers to carefully consider the affordability of their vehicle choice within its whole ownership cost and their broader household.”

All these pressures are mirrored in the latest market numbers. Naamsa reports that after five months of 2023, aggregate new car sales of 144,007 are lagging last year by 1.9%. Add commercial vehicles and the overall market grew by 3% over the same period, to 218, 869.

In May alone, 43,060 new cars and commercial vehicles were sold — a 10.1% improvement on May 2022. Cars grew only 0.1%, to 27,401.

After being briefly knocked off its perch by the new Ford Ranger, Toyota’s Hilux bakkie regained its place as South Africa’s top-selling vehicle in May.

Or should that be the Hilux car?