Cars have become a necessity in our lives. And nowadays, getting one has never been easier. With so many options to choose from, we can get overwhelmed with factors we have to consider. Sometimes, even the simple details can be overlooked, and we could end up spending more than we should.
While having a clear idea of what make, model, and colour of the vehicle we want to buy, there are more important things you need to be aware of. So, the good folks at Alpha Car Finance decided to share some tips on what you need to watch out for when getting car finance.
Know how much you can afford.
When you’re thinking about buying a car, it’s best to determine how much money you can afford to spend. You can search online for free tools like a monthly car payment calculator to know exactly how much you need to pay. Also, don’t forget to include other costs like fuel, vehicle insurance, and maintenance.
Know what option suits you best.
The last thing you want is to get into debt. Ask yourself first, “Can I afford to purchase the car outright?” If the answer is yes, the upside is you won’t have to pay high interest. On the flip side is, it can put a dent in your savings.
Buying a vehicle outright works best if you are willing to wait so you can save money for it. However, if you need a car straight away, then you may want to consider car finance.
Know your credit score.
Keep in mind that lenders will determine the approval of your vehicle’s financing and interest rate on your credit score. If you have an excellent credit score, then you should have no difficulty in getting approved and won’t receive a steep interest rate.
However, if you have a less than stellar credit rating, then consider looking for other financing options suited for people with poor credit history, like a car lease or a business car loan.
Don’t hesitate to negotiate.
This may seem obvious, but it’s not as easy to pull off. Car dealers are a crafty bunch, and they can trick you into negotiating payments. They would often ask how much you are willing to pay each month instead of negotiating the actual cost of the vehicle.
They do this because they will base the price of the car on the maximum amount of your monthly payments. And you’ll end up paying more than you should. So, haggle with the actual cost of the car and not your monthly payments.
Aim for a fixed rate.
Before you even set foot in a dealership, you should know whether you’re paying for a fixed or variable rate for your loan. Having a fixed rate will help you budget your daily expense easier compared to a variable rate which is more difficult to predict.
Avoid extras you don’t really need.
When you’re at the dealership, the shrewd car salespeople may bait you with additional accessories that you don’t really need, like a cool audio system and other bells and whistles. These car accessories cost more when you buy them at the dealership. So, it’s better if you shop around at a car accessory shop that is outside the dealership.
Don’t get carried away with your emotions.
It’s easy to make a purchase based on a whim, and buying a car is no exception. After you’ve taken your dream ride for a spin, felt its nice leather seats, and gotten high on that new car smell, it can be hard to let it go. Don’t let your feelings get in the way. Be prepared to leave the dealership if they are not willing to negotiate.
Over to you. Have you recently purchased a new car? How was your experience? Any tips you’d like to share? We’d love to hear them. Please leave a comment.