In Life Acts.
Today we want to take a closer look at what you should consider when you're buying a used car from a private seller, and I guess also what you should consider if you're selling in a private deal. I know it's appealing you can save money by doing it privately rather than going through a dealership, but of course that process comes with quite significant risks if you don't know
what you don't know to need to ask. So I hope today we're going to inform you a little bit more about some of the absolutely essentials that must be in place before you consider a private deal and to help us navigate the process. It's a great pleasure to welcome back to the show Ernest North, the co founder of the Naked Digital Insurance platform. Probably fully closed in the very cold conditions this afternoon, but Ernest always love me to have you on the show.
Welcome back, Thanks Papa, it's nice to be chatting again.
Courd.
Obviously, buying a used car privately puts an onus of some legwork on the buyer that a dealership would normally shoulder for you at a cost. So of course some people say I'll rather save the money and do it all myself, but not knowing what is essential to do yourself is a potential very expensive stumbling block if you don't get it right. Ernest, the one thing a lot of people struggle with immediately out of the gate is is how do I determine the right price to ask
for a vehicle? What do you suggest around the kind of homework that needs to be done on pricing?
Yeah, I think it's you're spot on the difference between buying from a dealer versus buying privately. They are definitely pros and cons. More often than not you can get a better deal, and I think that, but it does come with some risks, and so you do need to be careful. The most important thing is that I think it's become easier than ever before to shop around comprehensively, and the majority of that shopping you can do online.
It's become increasingly easy to go through the four or five big sites that less cars online, and very quickly you will start forming a pattern by seeing what is the right price that you should be paying for a
particular car, for a particular model, for particular mileage. Of course, those things one must always remember for the averages, So if you're buying a car with slightly higher mileage or it's in a slightly worse condition, you should be paying less and so make sure that you do comprehensive online research. But then the one and very importantly, you don't have
to limit yourself to your current geographical region. I think that's one mistake people make when they when they browse online, is they say, I don't want to buy a car outside of my own city. But no, you you have to look across the holl of South Africa to get the to investigate the price points so that you can
get comfortable that you're buying at the right price. But then the one that you that you are actually considering, you have to see that one in person so that you can evaluate whether the mileage and the actual condition the tiers, et cetera are better or worse than what you deem to be average.
Ernest I cannot emphasize this point enough, and I know Wendy Nola, our consumer journalist, would be echoing you at full throttle. You must see the vehicle and ideally you must drive the vehicle before you consider handing over your money. It's staggering to me how many consumer complaint cases we receive that start with I didn't take it on a test drive, or I sent a friend to take a look,
or I just bought its sight unseen. Do you want to just elaborate a little bit more about why it's so important to physically lay eyes on the vehicle.
Yeah, I think it's verity important to remember that when you're buying from another business, you are protected by the Consumer Protection Act, which means that if there's something wrong with the car which they misled you, or in fact they didn't even if it's just accidental they didn't know about it. If something goes wrong in the first six months, you have the right to go back to them and demand your money back, or to demand that the car
gets fixed. When you're buying from a private individual, you have no such rights, and so the responsibility you have to make sure that you are comfortable that the car is in good condition is so much greater because realistically, to fight with a private individual afterwards to dry and get your money back is almost impossib And I very strongly recommend that if you are going to save twenty or thirty thousand rand by buying a car directly, not
through a dealership, then rather spend a portion of that, let's say two or three thousand rand, getting a professional to look at the car before you actually buy it. DECRA, the AA, a number of other service providers make it very easy for you to take the car there. Some of them even come to you, but most of them it's easy to go there, have a one hour inspection done where they check the detail of the car and someone independent can tell you, yes, I don't see anything alarming.
It really is something that if you spend that one or two or three thousand rand, it's something that saves you a lot of money in the long term.
Ernest can that process also identify if this is perhaps a stolen vehicle, or if all is not right with the paperwork, would they pick up for example, if something wasn't in order.
Typically those same those in the vils don't perform the sort of the more the mechanic service is separate from the administration service. So if you the most important thing to get there is to consider the actual green registration certificate. I think one check. The most important check that you can do that most people forget to do is to the seller has to show you the original green certificate, not not a black and white copy. It has to be the original. And then you have to open the engine.
Have you have to open the bonnet and go look on the engine itself. That's the ven number matches and chack very very carefully. You have to check that the ven number matches on the engine, that which is on the green registration certificate.
Okay, that's such an important advice. Okay, so absolutely essential to check that the because I mean, you are if something. If you buy that car Erneston a month later the police are knocking on your door saying we believe you're in possession of a stolen vehicle.
You going to be in a really difficult position.
It's not something that happens super super frequently, Papa, but it's something that will be very inconvenient if it does. The more likely scenario is if you've driven that car for a couple of months and now it gets stolen or it gets written off, then your insurer will do a very detailed check and that's where we often find that someone had innocently been driving a car that was
actually stolen. And then the process of sort of reversing the original sale and all sorts of administration that goes with that is very very burdens and so the more you can protect yourself up front, the better.
We're talking to Ernest North, the co founder of Naked Insurance, about the perils and pitfalls, but obviously, of course the potential benefit of buying a car in a private deal as opposed to buying through a dealership, and if you're going to do it privately, just making everybody aware of the risks you run and how to sort of buffer yourself against those risks. Ernest, let's talk a little bit about the kinds of questions you should be asking the seller. Is what is it essential to ask?
I think obviously the service history is critical understanding. I mean, we all buy a car thinking that it's going to smell very nice and these legacyeds are going to be very comfortable, especially in the first couple of hours that I drive it. But then as you continue to own it, the risk of something breaking down increases, and you need to be comfortable that you understand how big that risk is and that you're not in for a surprise when you take it in for the first service or that
something doesn't break. So like checking the service history very carefully is important and it's a significant wait, certainly for a car that was within its first one hundred and twenty one hundred and fifty thousand kilometers having been serviced by an accredited a service provider. So if it is a specific brand, I'm always worried if a car as only sixty or eighty thousand kilometers but it wasn't on time serviced by the official brand of that service provider.
So that's one of the most important things I recommend people look into. Then you have to you have to underst stand also the mileage that this car is done. If you can sort of work on the rule of thumb of fifteen to twenty thousand kilometers a month a year, and if it's done significantly more than that, I would want to know why is that? What kind of trips has it done? Has this car been sort of on
more off road conditions. Has it been used in sort of commercial use, maybe transporting equipmental material, that sort of thing. I would want to know that. And then very importantly the accident history. There's you have to get that person to confirm to you in writing. And yes, the other mistake that people make then when they're buying private or
for that matter. From a dealership. You can't just ask people questions and then six months later say, oh no, but remember you told me this and that and that. You have to get them to confirm in writing a whole bunch of things that you want. So if they're giving you details on the service history, get them to put it in writing. If they're giving you confirmation that this car hasn't been in an accident according to their knowledge,
get it in writing. It's a small one to two page addition to the standard paperwork, which really makes it serves as a checklist for you. And I think going on to the Naked blog will help you formulate that checklist, but very importantly it helps you protect you a little bit more when you are or maybe a couple of weeks later, and something seems to be out of place, like having the conversation based on something that is black and white is always easier than just words.
Okay, you've mentioned a checklist on your blog, so Ernest, everything we're talking about here and additional information that we might not have time to cover, is that easily accessible? Where do listeners go to find that?
Absolutely? Just google the Naked Insurance blog and you can you can find all sorts of car buying tips, how much which cars costs to maintain, et cetera.
Okay, now we've spoken a little bit about the car inspection and how ideally it pays to have that done by a professional who's going to check everything from the tires to the lights, to the windscreen, wipers and all of that. But let's talk a little bit more about
the test drive. Ernest interesting comment here from Dennis, who reckons you should get the driver to do a test drive with you and get an impression of how they have driven this vehicle and notice what their their habits are like, especially manual shifts that clutch abuse, bad breaking, et cetera. Are quite like that Dennis, spying on the potential. But it's not a bad point. You have no idea how this person has treated the car before you.
Yeah, it's absolutely I think it's a nice suggestion from Dennis. I think in practice anybody can can can can fool you a little bit though, so I think getting getting a mechanic to have a look at the actual clutch plate will probably tell you more than the driving behavior. But it is a nice tip as well. The I think the first thing I want to say when it comes to the test drive is obviously number one priorities
your own personal physical safety. Unfortunately, people make the mistake of entering into dangerous situations, either doing it in a place where where there's not a lot of other people around, or doing it in a place where they're driving through a sort of a dangerous area, or they're sort of being scanned by a person that professionally pretends to be a car seller. So I always prefer to do this
in majority of test drives. I think you can do in a public space like a big shopping center's parking lot. Maybe you can go up and you can quickly go out one block, but I would I would remove the risk of significant physical safety a damage just by being in a public space where there's lots of other people around you.
Absolutely echoing what our listener Keith wrote, as you uttered those words, make sure the place where you go to view the vehicle is safe and or take somebody with you.
That's good advice, Keith. Thank you.
Right, we've spoken about the absolutely essential elements of checking that they have the original registration of this vehicle. Are you what can or can't you ask for or must you ask for in terms of proof of their identity ernest. Are you allowed to demand copies of the seller's ID for example?
Absolutely? So when you are it's always is. So there are two forms. There are two forms that need to be filled out when people are doing a private car transaction. Yeah. The one is the actual sale transaction form and the other one is the notification of change of ownership, so or sort of a registration document. The seller needs to You need to jointly sign one of those papers together,
and you are completely within your right. When they are signing their part, which includes their identity details, you are within your right to ask, may I just verify that this ID number and this name which you've given me he is actually the name of a real person. Please show me your ID document or your driver's license. That is a very good tip, So I strongly recommend that. And it's always good to do that paperwork in advance.
So very often people sort of rely on the one party to oh no, lets, I just want the call urgently, even though we haven't done all the paperwork. In practice, a sealer, once they've given you that key and once they have the money, getting hold of them and getting them to actually do the paperwork is very difficult and administratively that becomes a big issue on your part. Then, so don't take the key, don't give them the money until you've actually done the paperwork right there on the spot.
And when we say the money, ideally that's money in electronic form.
Not so, ernest. I know you very cautious about the use of cash.
Absolutely no. I think we live in an age now where it should be almost unthinkable to buy a car in physical, hard, cold cash. And I think, I mean, if we've mostly been talking about you as a buyer, I think if you're the seller and somebody rocks up with cash, I would be very very careful. I would recommend that you go into that that transaction then happens
in an actual bank where you can only receive. If you're ever to receive more than three or four thousand RAN in cash, you should agree with them that you only want to receive that in the actual bank branch where the bank can check that cash on the spot. You never want to be walking around with the cash because that's dangerous, but also you want to verify the validity of that cash. So I would I mean, I think in the year twenty twenty five that should almost never happen.
Ernest, You've given us so much food for thought. Thank you very very much, and we didn't touch on quite everything on the checklist, so I want to finish by reminding listeners that if you google Naked Insurance blog, you will find so much more information to help advise you through this process, whether you are the buyer or the seller. Ernest, thank you though for the time you've given us today. As always, very very practical and super helpful. Appreciate your time.
Thanks Papa. I hope everybody drives safe.
You too. Ernest North, co founder of Naked Insurance,