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