Chances are, if you’re planning to buy or lease a new car, you’re part of the increasing number of buyers who do their homework well in advance before taking a test drive. Many consumers research pricing information, features, options extras, specifications and safety. But if you’re not paying cash for your car, check interest rates and financing options with the same intensity. In most cases, the car dealers will work with you to explore financing options that fit your budget. But it’s always a good idea to have a solid game plan on financing and understand your options before you start the car buying process. Follow these processes to get the best car loan.
Do Your Homework
- Evaluate your financial situation and determine how much you can afford to pay.
- When doing your research, don’t let price alone be the determining factor. Even though a particular model may fit your price range, it may not meet your needs.
- Understand the differences between buying and leasing.
- Compare interest rates and financing terms from multiple sources such as banks and the car dealer.
- Stay within the price range you can afford.
- Base your purchase decision on the car and whether it meets your needs rather than shopping for the largest discount or other financial incentive.
- Focus negotiations on car price-not monthly payment. A few extra shillings in a monthly payment can add hundreds or thousands of shillings to the total amount paid over the life of the loan.
- Similar to price, financing terms are also negotiable. Negotiate your financing terms just as you would negotiate the price of the car.
- Understand the value and cost of optional products such as extended service contracts, credit insurance, or guaranteed auto protection, and only buy them if you need them.
- Read the contract carefully before you sign it. Ask questions about anything you don’t understand.
Protect Your Credit
- Make your payments on time. Late or missed payments may result in late fees, which can impact your ability to get credit in the future.
- If you financed the car, be aware that the bank, finance company, or credit union that bought the financing contract from the dealership holds log book until you have paid the contract in full.
If you have difficulty making your monthly payments, talk to your creditors. Work out a repayment schedule and, if necessary, seek the services of a non-profit credit counselling agency. Don’t wait until it’s too late.
Your car will need to be in shape as you continue clearing your loan. Have your car serviced at one of our recommenced garages across the country.