For most people buying a car is not something that can be done every day. It’s an investment that will live on for many years, which means you need to do your research and make sure that you are making the right decision with your money.
Car finance can help you spread payments over time, so they don’t seem as hard to afford.
First of all, it’s important to think about how much car finance you actually need. There are some things you should consider before taking the plunge with any kind of product like this:
Do I Really Want This?
To be honest, if you’re still dreaming after the new Mini Coopers, then perhaps now isn’t the time for you to be applying for finance.
Instead of buying a car you really can’t afford right now, why not consider leasing one instead?
How much is this going to cost me? Car finance is like all finance in that there are hidden costs.
Make sure you know what rates and fees are associated with the product before signing on the dotted line or taking out a loan.
Take some time to compare different providers and find one that will give you the most bang for your buck.
Who’s getting the money?
If you’re applying for finance through a dealer, they may want something from you as collateral. This could be anything from your house title to an agreed amount of money deposited into savings accounts with them.
Make sure that these requests are reasonable, or you’ll be left on the hook for more cash than you wanted to payout.
Can I Afford This?
It seems like a no-brainer, but sometimes we convince ourselves that something is affordable when it’s simply not.
If you’re taking finance through your dealer, they will most likely offer you an extended warranty too, which will just mean that they can charge more interest on your loan or payment terms.
These aren’t things that everyone needs, so only get them if you can really afford them.
Once you’ve got your head around these four steps – do I want this, how much is it going to cost me, who am I getting the money from, and can I really afford this? – then, you can start looking at the fine print.
Car finance providers will send you information around repayment options, fees, and rates; make sure that this is all clear before signing on the dotted line.
Many people do their vehicle research online these days, which can save you time if you’re able to narrow your choice down to a few models or brands.
This can also be used as a way to find out if there are any good offers available through dealerships in your area.
Just because they might have hundreds of listings on their website doesn’t mean they’ll give you the best deal – so compare prices across several different platforms.
Your bank is another option for getting car finance, but it’s always worth shopping around first.
You might find that there are deals out there available for much cheaper if you’re willing to go to a few different places or take the time to search online.
Finally, make sure you read any contracts thoroughly – especially if they ask for something from you as collateral – before signing anything.
Car finance providers may try and convince you otherwise but getting the cheapest deal is the best thing for your bank balance in the long run.
