The first step may seem obvious but it is possible to own a vehicle without a driver’s licence, however a licence is essential in any application for vehicle financing. After passing the DSA practical driving test, a driver can begin applying and exploring vehicle financing options.
Step Two: Find out what type of loans you qualify for
Individual credit ratings are dependent on age, income, type of employment and credit history. Professional financial institutions can provide the details of the type of credit options and amount that can be issued to you. Getting several quotes and options from different banks and loan providers will make sure that you select the best offer.
Things to consider:
· How much credit do you qualify for?
· What amount would you like to be financed?
· What type of repayment period would be the most suitable? Six Effective Steps to Auto Financing
Step Three: Finding a vehicle to finance
Sometimes buyers first look for a vehicle and then explore financing options. Knowing where your budget and credit stand can save you the time and disappointment of having applications rejected. Knowledge of what you can afford will make you approach car dealerships with a better idea of what you can get.
Things to consider:
· What type of vehicle and capabilities do you require?
· Would a new or used model be more suitable?
· Does the car have good reviews from existing drivers?
· Did the vehicle perform well and to your expectations during test driving?
Step Four: Evaluate financing options
This is the tricky part for new buyers, who often settle for what the bank or car salesmen suggest. Understanding interest rates and finance options will ensure that you get a contract that best meets your requirements.
Things to consider:
· Is a deposit on the vehicle required for the loan and if so how will the size of the deposit influence the repayment period and the amount of interest payable on the loan?
· What repayment period would you like and how will this affect the amount of interest paid over the period?
· Would you like a fixed or linked interest rate? Fixed interest rates remain constant for the length of the repayment period whereas linked rates are variable depending on the current primate rate of interest.
· Would you like to opt for a balloon payment at the end of the repayment period to reduce the monthly instalment?
Step Five: Additional services and insurance
New vehicles usually come with a standard service plan, maintenance plan and warranty. Buyers are also afforded the option to select extensions on these plans which can be advantages and more affordable than paying for services and maintenance separately. Insurance is mandatory with vehicle financing and the value of the premiums will depend on a driver’s age, demographic and driving record.Six Effective Steps to Auto Financing .
Things to consider:
· How will additional service or maintenance plans affect the amount to be financed, interest and repayment period?
· Does the financial institution or dealership offer insurance packages?
· Which insurance companies offer the best value for money for their monthly premiums?
Step 6: The application process
After you have selected your vehicle and evaluated all the financing options, you will be able to apply for financing. The application process typically requires a few days to a couple of weeks depending on the dealership and financial institution selected.
The following documents will need to be submitted:
· A copy of your ID document and driver’s licence
· Payslips for the last six months or more, dependant on the request
· Detailed bank statements for a specified period
