Jalopy or out the box?

CAPE TOWN - Having recently spent a few days in Grahamstown, and visited a few of the university residences there, I couldn't help but notice the marques of car parked in the parking lots.  Subaru, BMW, Mini, Mercedes - not exactly what I expected for a bunch of undergraduates.  Working postgraduates or professionals, maybe, but surely not teens who've only just got their licences?  It got me thinking about what I see other students driving around in Cape Town, and while a little more balanced back at home, it's not that far off the reality here either...

There are generally three ways parents can go when their kids come of driving age: Buy them their first car outright; contribute towards it; or leave them to fend for themselves.  Looking at the first option, there then seems to be two distinct schools of thought on what they should get - either a cheap banger, or a new (or almost new) version of one of the latest models.  The former group of parents believes that youngsters are a hazard on the road and are likely to be in an accident (hence refraining from overspending on a car that won't last too long), combined with not wanting their kids to grow up spoilt and with a sense of entitlement.  The latter is either motivated by wanting to give their kids whatever they want (maybe as a reward for getting into varsity), or by safety and reliability considerations - being prepared to shell out for the latest accident avoidance gizmos and safety technology (multiple airbags, crumple zones, ABS, ASC, and any other acronym you feel like).

Now, while I'm all for keeping your kids safe on the road, I don't quite feel that spending R200k on a car for your slightly mad 18-year-old son or daughter is justified.  What kind of a lesson are you teaching them?  I'm of the opinion that you have to do something substantial - really prove yourself - before you deserve something like that.  I don't feel it should just land in your lap, or you're being set up for disappointment later in life.  Think about the guys and girls who have to buy their own first cars - how much more proud are they are of what they've achieved?  How much more do they now know about the value of money? 

It's also not that smart a financial move either.  The newer and more expensive the car, the bigger the hit you're going to take on depreciation.  Insurance?  Please step forward for a kick in the balls.  And when you do want to sell the car on, I can promise that having "Previous owner a student" is not going to do you any favours on re-sale value.  Buying a less expensive car for your kids is, in my mind, a much smarter move.  If it's a bit older, it's already lost most of its value.  It's cheaper to insure.  Parts are probably less expensive to get hold of (although this can be heavily influenced by the make).  And if they dent, damage or crash it?  Well, it will probably come out better off than a lot of today's cars.

Personally, I aim to follow the example my dad set when myself and my two siblings came of age. Basically, he set out a rand amount of what he was prepared to help us out with.  We live very comfortably, and he probably could've afforded to buy us each a new toy out of the box, but that wasn't the point.  He wanted to teach us pride in our possessions, the value of money, and the importance of doing our research.  Nine years ago, my limit was R25k.  Two years later, my sister's was R30k.  And two years after that, my brother had R35k to spend.  In each case, we were all able to get a really decent first car, that served us well, without breaking the bank.

And what did I get?  I got a navy blue 1988 BMW 325i.  An absolute beaut of a car.  It's looked after me so well, and I still drive it to this day.  Value-wise, it's actually gone up, and I have people trying to buy it off me every week.  It doesn't have half of the new fandangled safety equipment of today's cars, but as I'm sure many of you know, the cars of yesteryear were built like tanks.  I was recently in a really bad accident (a drunk idiot not wearing his glasses jumped an intersection).  My baby took a hammering, but I walked away without a scratch.  Who says you have to spend a fortune to be safe?

*Gareth Cotten is a young serial entrepreneur who eats, sleeps and drinks business, entrepreneurship and innovation. When not advising others on their businesses or personal development, or working on his own enterprises, you'll find him on the beach, staring at the waves and talking to himself. For more info, go to www.goodadvice.co.za

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