Financial Steps to Take Before Buying a Car
Buying a car or vehicle can be a daunting process. After all, it is undoubtedly a serious investment. It can also be difficult to find enough capital to buy outright the car you need. Therefore, it is always a good idea to keep a plan in place to prepare for the financial demands of purchasing and running a vehicle for the first time.
It is worth remembering that many people buy cars and vehicles without having the full cost available in liquid cash. With this in mind, a number of options and avenues could open themselves up to you! In this guide, we will look briefly at ways in which you can prepare yourself financially for buying that first car.
Consider Your Funding Options
As mentioned, you may not have all the money available to buy your ideal car outright. If you do, however, it’s worth weighing up your options.
- Can you sell on an existing car to help fund a new purchase?
- How much money do you have available in savings?
- Can you feasibly afford the running costs of a new car – as well as outright costs?
- Are credit card purchase protection or flexible financing worth looking into?
For many people, flexible financing is required to fund the full cost of the car being purchased.
If you are unable to buy a car outright, it is worth considering applying for finance to help you make steps towards a purchase.
- Check your credit rating – is it healthy enough to offer lenders confidence?
- Get pre-approved for a loan or financing where possible – to adequately prepare yourself ahead of time and make sure you don’t put a deposit on a car that can’t be financed.
- Consider a chattel mortgage – where you can secure a loan against a car. That means you will ultimately own the car once all monthly payments have been cleared.
- It’s recommended you don’t consider credit cards to fund expensive assets, the interest rates are very high.
- You should also avoid financing your car by adding to your mortgage balance. While the 3.7% interest rate might sound appealing, over 20 years it adds up to MUCH higher interest payments than a 6% car loan over 5 years.
Buying a car is something millions of people do. Many do so with the help of finance – meaning that if you don’t have the savings or capital available to buy outright straight away, you could be entitled to flexible support.
Discuss Your Options
When it comes to financing the purchase or lease car, it is important to remember not to panic. There are experts always here to help you! Call the team here at Auto Car Loans today on 1300 301 051 to learn more about options available to you.