According to a recent study, the average car loan is nearly R200 000. Purchasing a vehicle involves a considerable amount of money and is often the second largest purchase decision made by a household. It is extremely important to understand and analyze vehicle finance options. This article is going to discuss the motor vehicle finance basics, including how to buy a car on credit and comparison shopping.
Vehicle manufacturers are continuously inventing new ways to lure prospects to their showroom floors due to the slumping sales of new cars. Although low monthly payments, zero percent financing and no money down bargains sound like great deals, you should be able to make fair comparisons. Before you decide to purchase a vehicle with motor vehicle finance there are three important factors to consider.
Before purchasing a vehicle, it is a smart idea to create a household budget. This is so that you don’t add to the financial burden of households that aren’t saving enough money each month. Through this process you will be able to gain a good understanding of what “affordable” actually means. A fair rule of thumb should be that your vehicle finance payment should be no more than 20% of your households disposable income. Disposable income is the money you have left over after paying for basic living expenses like mortgage, utility bills and credit card payments.
Prices of vehicle finance can be found here on LikeMoney whereby you can compare different vehicle finance options and research prices and most liked products of other users and even your friends.
A good starting point is to start shopping around, this can be done on LikeMoney as well. On the sit you will be able to find credit unions and finance lenders. When comparison shopping for vehicle finance, make sure you have a clear understanding of the the assumptions used by the lender. Interest rates, down payments and the term of the length of the loan. Don’t be intimidated to ask a lender for info that’s vital to understanding the terms and conditions of the loan.