Why December is the month to buy a car

You probably wondered what the best season to buy a car is. And it may never have crossed your mind if there is a time that you can ever find it convenient to buy a car. Apparently, the month of December is the best time to buy a car

Yes, as unbelievable as it sounds, it is true. So why is Christmas the best season to get your dream car, acquire new wheels or just get wheels so you too can cruise? During this season, a buyer may be able to get the best bargain than any other time of the year. The reason is that the importers are trying to get rid of the old stock of vehicles and so chances are that they will settle for a lesser price.

“During the festive season we are normally clearing stock. That is why we offer vehicles at minimal prices,” says Puddy Butamanya of Chatha Investment.
There is usually a rush to sell off cars because of a couple of reasons. First, there are extra costs incurred of maintenance of the cars and bond fees, especially for the cars that have gotten stuck in the bond.

Clearing stock
“We want to get rid of the cars that have stayed in the bond for a long time. We have about 600 cars and there are more on the way from Japan,”says Lali Saeed, a sales executive at Yuasa Investments Limited.

Saeed explains that they do not have the capacity to maintain all of these cars. Saeed adds that some cars like Mercedes Benz are sensitive and the longer they stay in the yard, the more they become exposed to damage unlike when the vehicle is out there being driven. Besides, there is Uganda Revenue Authority (URA) fees to clear if the car had not yet been fully cleared.

“Revenue keeps on piling as time passes, so you cannot afford to keep the car for an extended period because you have to pay its revenue,” says Bob Mawanda, a sales director at Blue Ocean Motors. Mawanda explains that when one exceeds six months, they risk having their cars auctioned for less than the money they desired.

“So, at this time when you find a buyer that can buy, payment could even be agreed. Instead of losing everything to URA, you sell at a low price with a loss of a few millions,” Mawanda argues. Consequently, the rates have been slashed to ensure that the old stock is cleared. Entry of new competitors in the car business has made some car importers even have more stock than the previous years.

“We used to sell 200-300 cars a month but now we only sell 80-90 cars due to an increase in competition. Right now, when selling the old stock, the customer benefits from buying at a low price,” says Mawanda. Although five to 15 per cent discounts have always been offered on cars, this time, the importers might be flexible at accepting the ‘not so good’ offers. Motor vehicle dealers have instituted small Christmas offers.

Offers
Blue Ocean Motors gives two brand new tyres to the owner of a car that has been bought (full payment). Chatha Investments is running a promotion with Centenary Bank where a buyer pays 30 per cent and gets a loan from the bank that pays the remaining 70 per cent.
Then the buyer starts repaying the loan in a period of up to five years for people who intend to buy a car from Chatha for the promotion ends in February next year.

However, there is no guarantee that after the Christmas season, prices will go up. Arguably the biggest advantage of buying now is because of the likelihood of getting a better deal for some importers that want to clear stock. In fact, other players like Hamza Motors do not have any offer besides the usual discounts. According to Ejaz Khan, the director of Hamza Motors, it is business as usual even at this Christmas season. He is not thinking of “clearing any old stock” because he has none.

Generally, the motor vehicle dealers say that this year, many people have withdrawn from buying cars because of the high prices. At Yuasa, a truck that was previously sold at Shs100m is now at Shs125m. This was after URA put a 25 per cent increment on the truck taxes. The rising dollar rate has also added weight on car prices leading to a low demand.

This Christmas season, one could choose from a wide range of saloon cars like Toyota Premio and Toyota Raum at Shs13m, Toyota Mark II at Shs16m, Toyota Caldina at Shs17m, Toyota Starlet at Shs12m. Others such as the Toyota Rav 4 and Toyota Nadia at Shs22m and Subaru Forester at Shs17-Shs18m. At Shs15m, a buyer could be spoilt for choice of Toyotas like Nadia, Corolla and Vitz (models of 98-2000). Records indicate Toyota Premio as one of the fast selling cars this year. Its success is attributed to being cheap and easy to maintain with a low fuel consumption. Others include Rav 4, Ipsum, Raum and Vitz.

editorial@ug.nationmedia.com