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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. We’ve put together a list of helpful tips to help you optimize your finance deal.
Choose your car carefully
The biggest decision to influence what you pay each month on car finance 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 less finance required and in turn the less the monthly finance premiums will be.
Put down a bigger deposit
With interest rates rising putting a good deposit down on your car will make a big difference to your monthly finance payment. The larger the intial deposit on your car, the lower the monthly premiums will be.
Pay as much as you can afford on monthly
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 spend.
Often car finance deals include a host of other products. Make sure the finance consultant fully explains what you’re getting and what each item costs.
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
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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.
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.
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.
Transferring your balance from one account to another may help to avoid interest, but is counterproductive when creating credit history. Financial insitutions 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
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