You’re about to embark on a three- to five-year journey with your beloved car. Before you apply for the car loan at the dealership, are you absolutely confident that you know everything there is to know, ’til loan do you part?
When you say ‘I do’ to your car loan you’ll need to be ready for the commitment. The car will be in your name and the loan will be your responsibility, until the full amount owed to the bank is paid off. Luckily, we are here to help you unpack the boot full of boo-boos that first-time car buyers make, so you don’t get trapped in a cycle of debt.
So what are some of the dos and don’ts that you should be aware of before you apply for your car loan?
- Apply for a car loan that is within your budget and make provision for all the mobility costs (petrol, maintenance, comprehensive insurance and car washes).
- Make sure you saved enough to put down a big deposit. If you have a big deposit this knocks money off the purchase price, you end up borrowing less from the bank, and pay your car loan off sooner.
- Maintain a good credit history. Always pay your loans and bills on time. The bank looks into your credit history to make sure you are a good borrower.
- If you are looking at a used car, consider extending the warranty or service plan to ensure you are covered once the current plan expires.
- Don’t be tempted to go above your