South African financial sector is blessed with abundant vehicle financing avenues and facilities.These facilities have enabled many people have a chance to own vehicles while paying for them over time. Below are a few tips regarding vehicle financing:
Car finance tips
Check your credit records – Get a report from each of the major credit reporting agencies.It is safer to check all major ones because you don’t know which one the lender will use and you may not have time to fix mistakes. Checking the credit score is also a clever idea because interest rates will depend on your credit score.
Shop around for the best rate – You shop around to get a good deal on your new vehicle,so why wouldn’t you shop around for the loan to pay for it.You are bound to experience unfortunate circumstances if you don’t do your research and you don’t have your loan lined up before you start shopping for a car.
Choose the shortest loan you can afford – As cars have become expensive,car loans repayments have become longer.You can now finance a car loan for a period of years and pay less on monthly installments.The downside is that you pay more on total cost in the long run because of high interest rates.Try to limit your car loan to a repayment period of 48 months.
Beware of finance scams – You sign all the paperwork, get the keys to your shiny new car and drive it home, assuming the deal is done. A few days or weeks later, someone from the dealership calls and says they were unable to get the financing approved at the agreed-upon price. So always be on the look out for scams.
Dont get hung-Lots of people assume that if they can afford the monthly payment,they got a good deal on the car.Buying a new car involves three negotiations.There is the price of the vehicle, the value of your trade in and financing. If you look at the monthly payment,you will have no idea what you are being charged for the car, you wont really know what you are getting for your old vehicle and you wont know what the interest rate really is.The artificially low monthly payment will disguise the fact that you are paying more than you should for the car and financing and getting less than you could for your trade in.