Buying a car? Remember these tips before you commit
These tips will ensure that your journey to owning your dream car does not turn into a financial nightmare
Whether it’s a compact car that offers lots of spunk, or something tough and rugged that allows you to channel your inner Chuck Norris. With so many vehicle models on the market choosing a new car can sometimes prove daunting.
Though choosing a new car is always exciting – particularly if it’s the first set of wheels that you will be calling your own – making an impulsive buying decision could be one that you live to regret.
Take the time to do research to ensure your new four-wheeled friend is the right fit for you. Investing in a vehicle is probably one of the most important life decisions you will ever make.
To ensure that buying a car is memorable for all the right reasons, gathering enough information to make the right choice that suits your needs is essential so remember these tips:
Create a budget to establish affordability
The budget has to go beyond just potential installment repayments – insurance, monthly fuel costs, toll fees, maintenance costs and the possibility of future interest rate increases also must be included.
In order to obtain finance from a bank, you will need to have a good credit history. Graduates who have recently gained employment may have to work for a while before they build up enough credit history to be eligible to apply for a vehicle loan.
Advice to vehicle buyers:
Purchase the vehicle you need, rather than the one you want but can't afford.
Be realistic when it comes to the short list of cars you are considering – SUVs might be highly aspirational, but affordable, fuel efficient vehicles will serve you well if you are under financial pressure, and you’ll thank yourself for your decision every time you have to fill up after a fuel price hike.
Always maintain your vehicle to limit the chances of unforeseen car-related expenses.
For buyers of used or second-hand cars, look out for vehicles that come with a warranty. If possible, try to extend the warranty or maintenance plan if these are included as part of the sale.
Be cautious of balloon payments.
While the option may provide you with more affordable monthly repayments up front, it ultimately includes a parting gift in the form of a substantial outstanding amount that you will have to repay at the end of the loan period.
Make sure that the outstanding balance will be covered by the value of your vehicle when you opt to trade-in it in or sell it to buy a replacement vehicle.
- Vehicle insurance
While it may be a grudge purchase for many, car insurance should be a mandatory inclusion in your car budget. If your vehicle is written off in an accident, you will still need to pay it off. Insurance will also help to cover potential third-party claims.
These tips will ensure that your journey to owning your dream car doesn’t turn into a financial nightmare.