Spoiling yourself with a new ride

by Nakedi Phala

You are ready to spoil yourself with a set of new wheels; you have been so anxious which car will suit your lifestyle and budget.

There are a few things you should take note of before you even approach a dealership whether you need the car for personal use or business – you ought to consider the circumstances surrounding the process and conclusion of the sale.

When buying a car, one needs to ask a few intra-questions:
What is my disposable income?
What is my credit score?
Will I be able to afford to maintain my car with or without a service plan?
Should I go for a brand new or pre-owned?
Do I have enough deposit to clamp down the balloon payment?

Many people buy cars through emotions of excitement most of the time, until, probably the seventh installment they start to take note of the overwhelming amount is being deducted – then run like headless chickens to the bank; do not be a chicken. Think before you sign the agreement of purchase. Clearly, at this phase, you have been daydreaming about the ideal car you desire, but is your disposable income in the same dream? Disposable income; also known as disposable personal income (DPI), is the amount of money that households have available for spending and saving after income taxes have been accounted for. Usually, a sales agent at the dealership will forward you forms through email or other means of communications to do your monthly expenditure – this is to give the bank an idea of how much they may be able to lend to finance your vehicle.

At this stage what happens is pre-qualification. Although, to a typical consumer, “you’re pre-approved” means “you already passed the approval process and therefore are guaranteed to be immediately granted the loan if you apply,” remember this will also be determined by your credit score. Before applying for lager credit make sure your accounts are up-to-date as this affects; how much you will be lent, at what rate – all will be determined by your paying behavior towards those debts.
At this point, your dream is near reality, and you can make it make come true cheaper by laying down a deposit, which in return can reduce your monthly installments and convince the bank that you have financial discipline. Remember there could be additional charges from the first quote, due to additions such as registration fees, finance fees, levy fees and/or car license fees – a good deposit usually helps you clamp down such charges.

If all went well, read your contract of agreement properly, do not allow the excitement to cloud your judgment; try to remain calm, re-think, reread the fine print. Once you have signed all required documents, do some shopping – car insurance if your dealership does not provide one[usually dealerships do but do it if they do not assist you in finding one.

Remember to buy a car that is within your budget, do not lie on your application for finance, and the car you buy should compliment your lifestyle considering the number of installments you will be paying. Happy cruising!