Speaker 1: In Life Acts.
Speaker 2: Today we want to take a closer look at what
Speaker 2: you should consider when you're buying a used car from
Speaker 2: a private seller, and I guess also what you should
Speaker 2: consider if you're selling in a private deal. I know
Speaker 2: it's appealing you can save money by doing it privately
Speaker 2: rather than going through a dealership, but of course that
Speaker 2: process comes with quite significant risks if you don't know
Speaker 2: what you don't know to need to ask. So I
Speaker 2: hope today we're going to inform you a little bit
Speaker 2: more about some of the absolutely essentials that must be
Speaker 2: in place before you consider a private deal and to
Speaker 2: help us navigate the process. It's a great pleasure to
Speaker 2: welcome back to the show Ernest North, the co founder
Speaker 2: of the Naked Digital Insurance platform. Probably fully closed in
Speaker 2: the very cold conditions this afternoon, but Ernest always love
Speaker 2: me to have you on the show.
Speaker 3: Welcome back, Thanks Papa, it's nice to be chatting again.
Speaker 1: Courd.
Speaker 2: Obviously, buying a used car privately puts an onus of
Speaker 2: some legwork on the buyer that a dealership would normally
Speaker 2: shoulder for you at a cost. So of course some
Speaker 2: people say I'll rather save the money and do it
Speaker 2: all myself, but not knowing what is essential to do
Speaker 2: yourself is a potential very expensive stumbling block if you
Speaker 2: don't get it right. Ernest, the one thing a lot
Speaker 2: of people struggle with immediately out of the gate is
Speaker 2: is how do I determine the right price to ask
Speaker 2: for a vehicle? What do you suggest around the kind
Speaker 2: of homework that needs to be done on pricing?
Speaker 3: Yeah, I think it's you're spot on the difference between
Speaker 3: buying from a dealer versus buying privately. They are definitely
Speaker 3: pros and cons. More often than not you can get
Speaker 3: a better deal, and I think that, but it does
Speaker 3: come with some risks, and so you do need to
Speaker 3: be careful. The most important thing is that I think
Speaker 3: it's become easier than ever before to shop around comprehensively,
Speaker 3: and the majority of that shopping you can do online.
Speaker 3: It's become increasingly easy to go through the four or
Speaker 3: five big sites that less cars online, and very quickly
Speaker 3: you will start forming a pattern by seeing what is
Speaker 3: the right price that you should be paying for a
Speaker 3: particular car, for a particular model, for particular mileage. Of course,
Speaker 3: those things one must always remember for the averages, So
Speaker 3: if you're buying a car with slightly higher mileage or
Speaker 3: it's in a slightly worse condition, you should be paying
Speaker 3: less and so make sure that you do comprehensive online research.
Speaker 3: But then the one and very importantly, you don't have
Speaker 3: to limit yourself to your current geographical region. I think
Speaker 3: that's one mistake people make when they when they browse online,
Speaker 3: is they say, I don't want to buy a car
Speaker 3: outside of my own city. But no, you you have
Speaker 3: to look across the holl of South Africa to get
Speaker 3: the to investigate the price points so that you can
Speaker 3: get comfortable that you're buying at the right price. But
Speaker 3: then the one that you that you are actually considering,
Speaker 3: you have to see that one in person so that
Speaker 3: you can evaluate whether the mileage and the actual condition
Speaker 3: the tiers, et cetera are better or worse than what
Speaker 3: you deem to be average.
Speaker 2: Ernest I cannot emphasize this point enough, and I know
Speaker 2: Wendy Nola, our consumer journalist, would be echoing you at
Speaker 2: full throttle. You must see the vehicle and ideally you
Speaker 2: must drive the vehicle before you consider handing over your money.
Speaker 2: It's staggering to me how many consumer complaint cases we
Speaker 2: receive that start with I didn't take it on a
Speaker 2: test drive, or I sent a friend to take a look,
Speaker 2: or I just bought its sight unseen. Do you want
Speaker 2: to just elaborate a little bit more about why it's
Speaker 2: so important to physically lay eyes on the vehicle.
Speaker 3: Yeah, I think it's verity important to remember that when
Speaker 3: you're buying from another business, you are protected by the
Speaker 3: Consumer Protection Act, which means that if there's something wrong
Speaker 3: with the car which they misled you, or in fact
Speaker 3: they didn't even if it's just accidental they didn't know
Speaker 3: about it. If something goes wrong in the first six months,
Speaker 3: you have the right to go back to them and
Speaker 3: demand your money back, or to demand that the car
Speaker 3: gets fixed. When you're buying from a private individual, you
Speaker 3: have no such rights, and so the responsibility you have
Speaker 3: to make sure that you are comfortable that the car
Speaker 3: is in good condition is so much greater because realistically,
Speaker 3: to fight with a private individual afterwards to dry and
Speaker 3: get your money back is almost impossib And I very
Speaker 3: strongly recommend that if you are going to save twenty
Speaker 3: or thirty thousand rand by buying a car directly, not
Speaker 3: through a dealership, then rather spend a portion of that,
Speaker 3: let's say two or three thousand rand, getting a professional
Speaker 3: to look at the car before you actually buy it. DECRA,
Speaker 3: the AA, a number of other service providers make it
Speaker 3: very easy for you to take the car there. Some
Speaker 3: of them even come to you, but most of them
Speaker 3: it's easy to go there, have a one hour inspection
Speaker 3: done where they check the detail of the car and
Speaker 3: someone independent can tell you, yes, I don't see anything alarming.
Speaker 3: It really is something that if you spend that one
Speaker 3: or two or three thousand rand, it's something that saves
Speaker 3: you a lot of money in the long term.
Speaker 2: Ernest can that process also identify if this is perhaps
Speaker 2: a stolen vehicle, or if all is not right with
Speaker 2: the paperwork, would they pick up for example, if something
Speaker 2: wasn't in order.
Speaker 3: Typically those same those in the vils don't perform the
Speaker 3: sort of the more the mechanic service is separate from
Speaker 3: the administration service. So if you the most important thing
Speaker 3: to get there is to consider the actual green registration certificate.
Speaker 3: I think one check. The most important check that you
Speaker 3: can do that most people forget to do is to
Speaker 3: the seller has to show you the original green certificate,
Speaker 3: not not a black and white copy. It has to
Speaker 3: be the original. And then you have to open the engine.
Speaker 3: Have you have to open the bonnet and go look
Speaker 3: on the engine itself. That's the ven number matches and
Speaker 3: chack very very carefully. You have to check that the
Speaker 3: ven number matches on the engine, that which is on
Speaker 3: the green registration certificate.
Speaker 2: Okay, that's such an important advice. Okay, so absolutely essential
Speaker 2: to check that the because I mean, you are if something.
Speaker 2: If you buy that car Erneston a month later the
Speaker 2: police are knocking on your door saying we believe you're
Speaker 2: in possession of a stolen vehicle.
Speaker 1: You going to be in a really difficult position.
Speaker 3: It's not something that happens super super frequently, Papa, but
Speaker 3: it's something that will be very inconvenient if it does.
Speaker 3: The more likely scenario is if you've driven that car
Speaker 3: for a couple of months and now it gets stolen
Speaker 3: or it gets written off, then your insurer will do
Speaker 3: a very detailed check and that's where we often find
Speaker 3: that someone had innocently been driving a car that was
Speaker 3: actually stolen. And then the process of sort of reversing
Speaker 3: the original sale and all sorts of administration that goes
Speaker 3: with that is very very burdens and so the more
Speaker 3: you can protect yourself up front, the better.
Speaker 2: We're talking to Ernest North, the co founder of Naked Insurance,
Speaker 2: about the perils and pitfalls, but obviously, of course the
Speaker 2: potential benefit of buying a car in a private deal
Speaker 2: as opposed to buying through a dealership, and if you're
Speaker 2: going to do it privately, just making everybody aware of
Speaker 2: the risks you run and how to sort of buffer
Speaker 2: yourself against those risks. Ernest, let's talk a little bit
Speaker 2: about the kinds of questions you should be asking the seller.
Speaker 2: Is what is it essential to ask?
Speaker 3: I think obviously the service history is critical understanding. I mean,
Speaker 3: we all buy a car thinking that it's going to
Speaker 3: smell very nice and these legacyeds are going to be
Speaker 3: very comfortable, especially in the first couple of hours that
Speaker 3: I drive it. But then as you continue to own it,
Speaker 3: the risk of something breaking down increases, and you need
Speaker 3: to be comfortable that you understand how big that risk
Speaker 3: is and that you're not in for a surprise when
Speaker 3: you take it in for the first service or that
Speaker 3: something doesn't break. So like checking the service history very
Speaker 3: carefully is important and it's a significant wait, certainly for
Speaker 3: a car that was within its first one hundred and
Speaker 3: twenty one hundred and fifty thousand kilometers having been serviced
Speaker 3: by an accredited a service provider. So if it is
Speaker 3: a specific brand, I'm always worried if a car as
Speaker 3: only sixty or eighty thousand kilometers but it wasn't on
Speaker 3: time serviced by the official brand of that service provider.
Speaker 3: So that's one of the most important things I recommend
Speaker 3: people look into. Then you have to you have to
Speaker 3: underst stand also the mileage that this car is done.
Speaker 3: If you can sort of work on the rule of
Speaker 3: thumb of fifteen to twenty thousand kilometers a month a year,
Speaker 3: and if it's done significantly more than that, I would
Speaker 3: want to know why is that? What kind of trips
Speaker 3: has it done? Has this car been sort of on
Speaker 3: more off road conditions. Has it been used in sort
Speaker 3: of commercial use, maybe transporting equipmental material, that sort of thing.
Speaker 3: I would want to know that. And then very importantly
Speaker 3: the accident history. There's you have to get that person
Speaker 3: to confirm to you in writing. And yes, the other
Speaker 3: mistake that people make then when they're buying private or
Speaker 3: for that matter. From a dealership. You can't just ask
Speaker 3: people questions and then six months later say, oh no,
Speaker 3: but remember you told me this and that and that.
Speaker 3: You have to get them to confirm in writing a
Speaker 3: whole bunch of things that you want. So if they're
Speaker 3: giving you details on the service history, get them to
Speaker 3: put it in writing. If they're giving you confirmation that
Speaker 3: this car hasn't been in an accident according to their knowledge,
Speaker 3: get it in writing. It's a small one to two
Speaker 3: page addition to the standard paperwork, which really makes it
Speaker 3: serves as a checklist for you. And I think going
Speaker 3: on to the Naked blog will help you formulate that checklist,
Speaker 3: but very importantly it helps you protect you a little
Speaker 3: bit more when you are or maybe a couple of
Speaker 3: weeks later, and something seems to be out of place,
Speaker 3: like having the conversation based on something that is black
Speaker 3: and white is always easier than just words.
Speaker 2: Okay, you've mentioned a checklist on your blog, so Ernest,
Speaker 2: everything we're talking about here and additional information that we
Speaker 2: might not have time to cover, is that easily accessible?
Speaker 2: Where do listeners go to find that?
Speaker 3: Absolutely? Just google the Naked Insurance blog and you can
Speaker 3: you can find all sorts of car buying tips, how
Speaker 3: much which cars costs to maintain, et cetera.
Speaker 2: Okay, now we've spoken a little bit about the car
Speaker 2: inspection and how ideally it pays to have that done
Speaker 2: by a professional who's going to check everything from the
Speaker 2: tires to the lights, to the windscreen, wipers and all
Speaker 2: of that. But let's talk a little bit more about
Speaker 2: the test drive. Ernest interesting comment here from Dennis, who
Speaker 2: reckons you should get the driver to do a test
Speaker 2: drive with you and get an impression of how they
Speaker 2: have driven this vehicle and notice what their their habits
Speaker 2: are like, especially manual shifts that clutch abuse, bad breaking,
Speaker 2: et cetera. Are quite like that Dennis, spying on the potential.
Speaker 2: But it's not a bad point. You have no idea
Speaker 2: how this person has treated the car before you.
Speaker 3: Yeah, it's absolutely I think it's a nice suggestion from Dennis.
Speaker 3: I think in practice anybody can can can can fool
Speaker 3: you a little bit though, so I think getting getting
Speaker 3: a mechanic to have a look at the actual clutch
Speaker 3: plate will probably tell you more than the driving behavior.
Speaker 3: But it is a nice tip as well. The I
Speaker 3: think the first thing I want to say when it
Speaker 3: comes to the test drive is obviously number one priorities
Speaker 3: your own personal physical safety. Unfortunately, people make the mistake
Speaker 3: of entering into dangerous situations, either doing it in a
Speaker 3: place where where there's not a lot of other people around,
Speaker 3: or doing it in a place where they're driving through
Speaker 3: a sort of a dangerous area, or they're sort of
Speaker 3: being scanned by a person that professionally pretends to be
Speaker 3: a car seller. So I always prefer to do this
Speaker 3: in majority of test drives. I think you can do
Speaker 3: in a public space like a big shopping center's parking lot.
Speaker 3: Maybe you can go up and you can quickly go
Speaker 3: out one block, but I would I would remove the
Speaker 3: risk of significant physical safety a damage just by being
Speaker 3: in a public space where there's lots of other people
Speaker 3: around you.
Speaker 2: Absolutely echoing what our listener Keith wrote, as you uttered
Speaker 2: those words, make sure the place where you go to
Speaker 2: view the vehicle is safe and or take somebody with you.
Speaker 1: That's good advice, Keith. Thank you.
Speaker 2: Right, we've spoken about the absolutely essential elements of checking
Speaker 2: that they have the original registration of this vehicle. Are
Speaker 2: you what can or can't you ask for or must
Speaker 2: you ask for in terms of proof of their identity ernest.
Speaker 2: Are you allowed to demand copies of the seller's ID
Speaker 2: for example?
Speaker 3: Absolutely? So when you are it's always is. So there
Speaker 3: are two forms. There are two forms that need to
Speaker 3: be filled out when people are doing a private car transaction. Yeah.
Speaker 3: The one is the actual sale transaction form and the
Speaker 3: other one is the notification of change of ownership, so
Speaker 3: or sort of a registration document. The seller needs to
Speaker 3: You need to jointly sign one of those papers together,
Speaker 3: and you are completely within your right. When they are
Speaker 3: signing their part, which includes their identity details, you are
Speaker 3: within your right to ask, may I just verify that
Speaker 3: this ID number and this name which you've given me
Speaker 3: he is actually the name of a real person. Please
Speaker 3: show me your ID document or your driver's license. That
Speaker 3: is a very good tip, So I strongly recommend that.
Speaker 3: And it's always good to do that paperwork in advance.
Speaker 3: So very often people sort of rely on the one
Speaker 3: party to oh no, lets, I just want the call urgently,
Speaker 3: even though we haven't done all the paperwork. In practice,
Speaker 3: a sealer, once they've given you that key and once
Speaker 3: they have the money, getting hold of them and getting
Speaker 3: them to actually do the paperwork is very difficult and
Speaker 3: administratively that becomes a big issue on your part. Then,
Speaker 3: so don't take the key, don't give them the money
Speaker 3: until you've actually done the paperwork right there on the spot.
Speaker 2: And when we say the money, ideally that's money in
Speaker 2: electronic form.
Speaker 1: Not so, ernest. I know you very cautious about the
Speaker 1: use of cash.
Speaker 3: Absolutely no. I think we live in an age now
Speaker 3: where it should be almost unthinkable to buy a car
Speaker 3: in physical, hard, cold cash. And I think, I mean,
Speaker 3: if we've mostly been talking about you as a buyer,
Speaker 3: I think if you're the seller and somebody rocks up
Speaker 3: with cash, I would be very very careful. I would
Speaker 3: recommend that you go into that that transaction then happens
Speaker 3: in an actual bank where you can only receive. If
Speaker 3: you're ever to receive more than three or four thousand
Speaker 3: RAN in cash, you should agree with them that you
Speaker 3: only want to receive that in the actual bank branch
Speaker 3: where the bank can check that cash on the spot.
Speaker 3: You never want to be walking around with the cash
Speaker 3: because that's dangerous, but also you want to verify the
Speaker 3: validity of that cash. So I would I mean, I
Speaker 3: think in the year twenty twenty five that should almost
Speaker 3: never happen.
Speaker 2: Ernest, You've given us so much food for thought. Thank
Speaker 2: you very very much, and we didn't touch on quite
Speaker 2: everything on the checklist, so I want to finish by
Speaker 2: reminding listeners that if you google Naked Insurance blog, you
Speaker 2: will find so much more information to help advise you
Speaker 2: through this process, whether you are the buyer or the seller. Ernest,
Speaker 2: thank you though for the time you've given us today.
Speaker 2: As always, very very practical and super helpful. Appreciate your time.
Speaker 3: Thanks Papa. I hope everybody drives safe.
Speaker 1: You too. Ernest North, co founder of Naked Insurance,