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Tips to help you save on car finance
The excitement of getting a new car can often lead one to make rash decisions when deciding on the various options for car finance. Making the wrong finance decisions up front can have a huge financial impact down the line. We’ve put together a list of helpful tips to help you optimize your motor finance deal.
Choose your car carefully
The biggest decision to influence what you pay each month is the type of car you will be driving! Used cars are often a much more affordable option as the previous owner has taken the hit on depreciation over the first couple of years. The cheaper the car, the lower the monthly car finance premiums will be.
Put down a bigger deposit on your car
With interest rates high putting down a good deposit on your car will make a big difference to your monthly car finance payment. The larger the intial deposit on your car, the lower the monthly finance premiums will be.
Pay as much as you can afford on monthly premiums
Car finance can be organized for anything from 12 months to 5 years. The lower the period you choose, the more your monthly payment. Be careful however to compare your total payment over duration of the deal for different payment periods. Paying your car off quickly will dramatically reduce your total finance spend.
Shop around for better quotes
Car finance quotes may differ from finance house to finance house. You may get a better interest rate on your finance if you are willing to shop around.
Look out for extras in your car finance agreement
Vehicle finance deals often include a host of other products. Make sure the finance consultant fully explains what you’re getting in your finance deal and what each item costs.
Ask about penalties in your agreement
Pay careful attention to the terms of the loan. Make sure there are no penalties for paying your used car loan off early.
Please note that tips provided on car finance by cars.co.za are meant only as a guide to the user
Tips to help strengthen your credit score
A good credit score is vital when applying for car finance. This score is used by financial institutions to gauge how likely you are to pay off a car loan. Your score may not only affect whether or not you are granted a loan, but also the interest rate charged for the loan. A ood credit score can therefore save you money on your car repayments
Manage your accounts well
A well managed account will result in a good credit score. This applies to all bank accounts and credit account. Do not go into overdraft (unless you have the facility in place) or default on any payments.
Open a clothing account
Clothing accounts have been used for credit history by finance institutions for a long time. Opening a clothing account(the best being an Edgar's account) can therefore help create credit history quickly. Simply open an account, buy something on credit, and pay it off correctly. This can yield results in as little as three months.
Stick to one account
Transferring your balance from one account to another may help to avoid interest, but is counterproductive when creating credit history. Financial institutions want to see long standing established accounts from which they can track your credit records.
Open an account as soon as possible
The longer an account has been active, the higher the credit score will be. Make sure you keep the account active and always pay the account on a regular basis. Do not fall behind on payments!
Please note that tips provided on credit score by cars.co.za are meant only as a guide to the user
