Vehicle Financing Tips

South Africa’s financial markets are awash with vehicle financing offers. It is extremely important to educate yourself about financing when you are shopping for a car. You must understand that the loan is just another product that the dealership is trying to sell. Below are some key vehicle financing tips.

Have a clean slate – Not all lenders will give you the green light for a car loan if you have a history of poor credit. Others will agree to lend to you, but may offer higher rates of interest for the privilege. So if you’re in the market for a loan, clear any outstanding bills and establish a savings pattern to help prove that you’ll be able to service a loan.

Know how much you can afford – Sit down and work out how much you can realistically afford each month and then give yourself a buffer. Use a car loan calculator to help you crunch the numbers.

Limit your applications – While you might be tempted to put in multiple applications for a car loan or credit card to ensure you get the best deal, doing so can impact your credit rating  particularly if you’re knocked back. Instead, find one great finance option and stick with it.

It pays to compare – In the same way that you’d shop around for the best price on a new car, shopping around for a great car loan can ultimately save you hundreds, if not thousands, of dollars. Conducting a financial comparison will save you time otherwise spent trawling provider’s websites and will likely save you money too.

Consolidation could save you – If you have multiple debts, such as a credit card and a car loan, then combining them into one loan could save you because the more you borrow, the lower the rate. Plus consolidated debt can be simpler to understand and keep track of, so you’ll be able to concentrate on paying down one sum.