car finance experts

car finance experts

The Comprehensive Guide to Car Finance: Insights from Experts

1. Introduction to Car Finance

Buying a vehicle, whether it’s a new or preowned car, motorcycle, or boat, often calls for some serious financial commitment. The Comprehensive Guide to Car Finance will help you make the best decisions on how to finance a significant asset – a vehicle. Follow the pages, and broaden your knowledge of car finance. We are indebted to the following professionals and institutions who have shared their experience, time, and knowledge with AutoTrader as contributors to the Comprehensive Guide to Car Finance.

The Comprehensive Guide to Car Finance has been brought to you by the AutoTrader and Reliks Finance team. With insights and opinions from finance professionals and authorities on car finance, you will surely find useful quality information from the first page to the last. In our special project, we hope to provide current and future vehicle owners in South Africa with the facts and tools required to successfully influence the critical investment decision – the ownership of a dynamic means of transport.

2. Types of Car Financing Options

When you purchase a car, you’re investing in a product that incurs a decreasing lifetime of costs. Initially, the selling price of a car is at its highest point; it continuously depreciates during the car’s life. When you no longer want or cannot use the car, you sell it for its appreciably lower price. If you borrow money for the purchase, you will have to pay interest in addition to repaying the original amount, even if you later sell the car for much less than you paid.

However, you look at it, borrowing money costs you money, regardless of the sort of loan. This is the basic premise of the complex forms of car finance that are available today. By looking at how a loan is calculated, how car prices have been affected by changes in the money supply and supply and demand, we can gain greater insight into the financing of a product which many people are already committed.

3. Factors to Consider When Choosing Car Finance

Whether you’re buying a car for the first time or you’ve done it a few times before, investigating your financing options should be a step that follows your chosen vehicle. Many first-time car buyers or beginner investors may not even be aware of the fact that they can secure more advantageous rates than they think. However, finding and securing a great finance deal can take time. As with most financial processes, the more diligent you are, the better payback you’ll receive in a strong interest rate. Today, you can walk into a bank or any dealership and find an overwhelming number of options at extremely varying rates. The purpose of this section is to help you educate yourself about these choices so that you can hop to it quickly and secure a dream car investment! In this section, we turn to car finance experts—the dealer managers that see people on a daily basis and respond to their varied needs. You will find different routes that will lead you to the right place for you at each crucial stage of your journey.

There are big decisions to make, even after you have decided on what model is right for you. The ones that have to be made before you actually have your keys in hand pertain to the method for paying for your investment, rather than the price of the investment itself or the timing of your purchase. It is understandable that discussions about the best way to fund your car might not be exciting in the first steps of your vehicle purchase journey. Nevertheless, getting the type of finance that works for your specific situation is a vital consideration. After all, driving away in your new car will be impossible without knowing how you are going to pay for it. And while there are many resources out there and expert opinions could seem biased to be of help, you will eventually come down to a decision that gives you peace of mind for your recurring or initial car payments.

4. Best Practices for Managing Car Finance

Car finance is a convenient way to finance your dream car. However, it is important to manage car finance well to ensure that you obtain the total loan amount and avoid complications later. We take you through the best car finance practices so you can make an informed decision.

1. Pay attention to your credit report.

Before you apply for car finance, you must check your credit report. Your credit report will be created by credit bureaus using information provided by your creditor. It captures loan amounts borrowed by you, loan amount paid, current outstanding loan amount, EMIs paid, EMIs defaulted, etc. If any of these are incorrect, they will lower your credit score. As a rule of thumb, a credit score of 750+ is demanded by bankers to consider a loan application.

2. Minimum loan amount.

Don’t borrow more than you need. That’s the fundamental principle of availing of car finance. A car loan is borrowed to purchase a car, not an additional entertainment device, parking slot, or insurance cover. Any loan amount borrowed should keep this principle in mind.

The idea is to free up as much money as possible each month for living expenses, other debts, and other long-term goals like saving for your retirement and your children’s education. If the EMI is greater than 50% of your discretionary income, then it’s over-leveraging yourself.

3. Check lender repayment conditions.

Ask the lender if you can repay the car finance early, and how you can do it. Some lenders will only let you repay the outstanding balance at certain times, such as at the end of a fixed-term agreement. You can check whether your lender will allow this, any penalties that you might have to pay, and how the amount will be calculated if you wanted to repay early. The possibility of repaying the car finance early is an important factor to consider when choosing your lender.

However, most of the car finance professionals don’t possess sufficient knowledge about car finance, and that’s why they are not empowered to explain properly the each and every aspect of car finance deal. To overcome this issue, companies provide training to their employees and make them capable enough to handle customers and serve them better. Companies train their employees to be successful and to increase their sales in the market. Such trainings help employees in identifying major or minor obstacles of the people, so they can easily guide them. Car finance professionals usually have one-on-one time with their clients, due to which they educate themselves by listening carefully and doing their homework.

5. Expert Tips and Advice for Securing the Best Car Finance Deals

We’re going to wrap up this comprehensive guide with some expert tips and advice for securing the best car finance. What are they? Keep reading to discover them!

1. Consider the options in addition to dealerships. You don’t have to stick with dealerships when looking for a car loan. A lot of small lenders (such as credit unions or community banks) offer this service too. It may be useful to compare different options.

2. Check your credit report beforehand. A lot of people don’t even know that they have errors in their credit reports. Make sure to check this information with at least one of the three major consumer credit reporting companies: Experian, Equifax, and TransUnion.

3. Refinance the loan if the interest rate is too high. If you have just recently bought a car and you have just realized that your car finance was quite expensive, don’t worry. It’s still possible to refinance the loan if a better opportunity appears in the near future.

4. Don’t underestimate the value of a down payment. It’s quite important to have some money for the purchase of a car. Even though many people will finance most of the transaction, the purchase experience will be much better if you have a down payment. You’ll be able to pay off the car loan faster if you aren’t owing the entire sum, which means that you’ll also pay less for the car in total. Data gathered by Edmunds shows that lenders don’t even have to worry about offering someone a bigger loan over the limit. According to the data, a 20% down payment may be enough for borrowers with FICO scores and vehicle-financing figures closer to the requirements.