The thought of a new car can make us make rash decisions. Before you know it you have a shiny new vehicle that you can’t afford to insure or drive. Before you buy your new vehicle it’s important to slow down and think about how you’re going to be able to afford it. The best way is often to pay in full at the time of purchase but not many of us have that option. If paying in full is an impossible plan you could use car finance instead.
What is Car Finance?
Car finance is basically a loan from a provider. The money goes towards the purchase of a car and nothing else and you simply need to make the repayments each month until the cost of the car and the added interest are paid in full. Car finance is the easiest way to buy a car and a large majority of cars you see on the roads are purchased using this option. You will be provided with a set amount of money to pay each month for a fixed period of time, usually over 3 to 5 years.
What Cars Can You Buy on Finance?
Often if you use finance you’re able to afford vehicles that would otherwise be far too expensive. You can look at both new and previously owned cars but you will need to look in the right places. Some private sellers will want cash only and car finance is not usually an option, although you could apply for a loan from your bank to make the purchase. They will give you the cash directly into your bank account and you’ll be able to simply hand it over to the seller.
How Much Can You Borrow?
Always work out how much you can afford to borrow rather than applying without a real idea. It’s important that you will be able to keep up the repayments each month or else you could end up without a vehicle. If you make the repayments on time within the set time period you will then have the option of using finance again to fund the purchase of your next car.
Many of the dealers that sell used cars will either provide you with car finance options or accept finance from a provider you found. It’s not a complicated process, if you visit cars.co.za you will be able to fill in the online form and a provider will get in touch with you and explain the options, costs and amount that you can afford to borrow. From there you can begin your search for the car you want based on the manufacturer, your location or the price range that you can borrow. Before you know it you will be driving a car that you can afford. Using car finance opens many more doors, so before you attack your savings always consider using car finance instead to spread out the cost.
Image attributed to: freedigitalphotos.net Simon Howden