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    You are at:Home»Vehicle loans»10 Things You Need to Know About Vehicle Finance

    10 Things You Need to Know About Vehicle Finance

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    By admin on January 11, 2017 Vehicle loans

    Your credit score is important

    This may possibly be the most important determinant of how much vehicle finance you get. If you have a good credit record you’re likely to be charged lower interest rates.

    You’ll also be paying back interest

    In addition to the principal portion of the debt, you’ll also be paying back interest. So the longer you take to repay vehicle finance, the more interest you’ll pay in the long run.

    You have the option of a Lease Agreement

    You could consider this as an option instead of buying a car. You’ll get lower repayments and when the lease expires, you can simply sign up for another one.

    You may need a significant down payment

    A down payment may not always be required, but it may be worth considering if you want to lower your overall repayment.

    Be careful of balloon payments

    There are various vehicle finance options. One of the most popular is with a balloon payment option at the end of the loan term. This option makes vehicles more affordable.

    The balloon payment is a lump sum that you still owe, after making repayments. Once you’ve made repayments, you will need to repay this amount in full or refinance it.

    Consider value-added products

    It’s important to protect your finance. For instance, you can get value-added insurance packaged that will refund your deposit in the event of a major accident or theft.

    Comprehensive insurance is important

    When you sign your vehicle finance contract you’ll need to provide proof of comprehensive insurance.

    Be clear about the finance term

    In South Africa, the vehicle finance term ranges from 12 to 72 months. You need to choose a term that will suit your budget and affordability.

    You have options to speak to an F&I manager

    An F&I manager at the dealership can help you structure your finance agreement and give you insurance products relevant to your transaction.

    Interest rates can be fixed or variable

    You can choose a fixed or variable interest rate. Each option has its own merits, which you need to weigh before signing the contract.

    To see what you need for vehicle finance through African Bank online, click here

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