Vehicle Finance Tips

Vehicle finance provides a convenient and easy way of driving the car you want right now, while paying off the purchase price over a set period of months.The finance company in this case pays for the vehicle and cushions off the burden.

For transparency and accountability purposes, the contract will determine the period of finance, how many months you will make monthly payments for and the interest rate involved which can be fixed or linked.The most important points to think about when deciding to find vehicle finance are as follows:

• Always leave a buffer on your disposable income once you have taken your car payments into account. Don’ use every single cent on expenses, you may need extra cash should interest rates increase.
• Take fuel costs, maintenance, security as well as insurance payments into account when setting aside a portion of your budget for car payments, these are called motoring costs.
• Keeping a clean credit record requires diligence in paying your creditors on time as well as budget discipline, but this will help ensure that you get a favourable rate of interest when applying for vehicle finance, thus minimising your repayments and saving you money.
• At the first sign of trouble, do not hesitate to contact your creditors to inform them about your situation, and secondly to see if they can not offer you any relief or advice.
• It may be possible to reschedule your contracts with certain institutions as well as restructure the terms of the vehicle finance contract. The period of finance can be extended up to 72 with the new National Credit Act.This also implies that other institutions may allow you to put on a balloon payment if it makes sense for both you and the bank.

If the above tips are well observed, vehicle finance process should be stress free.