Buying cars on credit is now quite easy. Simply having a down payment as well as salary or a fixed income, we can bring the car home ideal. At first glance, the theory is easy. But does such a thing?
“If not done with proper financial planning, purchasing a car it would be a problem,”
some things that must be considered by someone who intends to buy a car on credit is, to measure their financial capability, choose a bank or financial institution is right, and to determine the tenor or the period of the loan. ”That all the necessary preparations,”
So, what I should be prepared?
1. Strive to advance more than 20 percent
Despite the bank or financial institution is currently offering an advance amount only 10-20 per cent, should not be tempted by the lure of it. Make sure you have the principle, that the down payment should be more than that, possibly even above 30 percent.
The reason is, the larger the down payment so the more you have the opportunity to choose the amount and tenor of the mortgage or loan period. ”In principle, the larger the down payment, the smaller the mortgage,”
2. Make sure the tenor does not exceed the age of economical cars
Having determined the amount of money that reaches 30 percent of the selling price of cars or more, the next step is to establish the tenor or the credit period. One thing to keep in mind, choose a tenor who did not exceed the period or economic life of the car.
“In general, car manufacturers set their product economically age average of five years. So try tenor no more credit than that, ”
Because, when it has exceeded four or five years then you have a lot to spend extra money for repairs. You see, at the age of the car at the age of five years, that’s when the repairs. And you still have to pay the mortgage. So, you have to spend twice as much.
“The money saved should be used for cars,”
3. Avoid cash advances from the loan
One more thing that you should avoid is, do not use money borrowed from the lending bank or financial institution to increase the down payment. Because, if that happens, then the same as you have two double installment obligations. More than that, the car you bought was not as a matter of value: the cash price plus the interest on the loan during the loan period.
4. Choose the appropriate source of financing
So far, there are two institutions that used to provide a source of financing and cooperation with car sales dealers, banks and leasing. Each has advantages and disadvantages.
In general, banks typically set a smaller rate than leasing. Only, terms and credit approval process is much more stringent than banks. And vice versa.
Bank also further compromise if you are having trouble paying the mortgage. Possibility to reschedule or debt restructuring is much more open. ”It’s not all leasing without compromise, but generally like it. If you are delinquent three times they will confiscate your car,”
Therefore, the bank placed a high priority option, then the new lease. If it turns out showroom where you will buy the car did not give the banks and leasing options should be left alone.
5. Provide funding for risk reserves
Even if you can afford the repayments exceed the minimum and advances above 30 percent, you should also think about the possibility of risk when financial difficulties. Therefore, in addition to car installments should still set aside a portion of income for special savings in the event such risks.
“Split it with a savings fund savings for education and the future of children and other family needs,”
The other way is, to insure your car with the nature of all risk. Indeed, there is an additional glimpse of the new fee. But when examined it will be much more profitable than no insurance.
Because if there is a problem, such as hit, graze, stolen, or damaged because of a riot, your costs will be much more expensive. About the source of the cost, again, put some of your funds into investment instruments.
6. Never give priority to prestige rather than function
Never force yourself to buy a car that cost more than our abilities, thus causing you a big stake than the pole. Set in principle, prefer the convenience functions to support the car and not put prestige.
Measure your financial capability. ”That’s the most important, do not put prestige, or let me come up short from famous,”
