Fuzion Group Logo

Buying a New Car? Here are 5 Helpful Tips

By

Used Cars Cape Town – Before you sign on the dotted line for your new car’s finance make sure that you got your facts straight! Do you understand fixed and linked interest rates or balloon payments? Don’t stress, not many people know these crucial terms. Here are some tips to help you cruise through your car finance decisions.
  1. Ask loads of questions
All dealerships have a Finance and Insurance representative who will guide you through the process of financing your car. They will go through a checklist of important points with you – make sure that you understand each point before signing and driving away in your new car.
  1. Know your finance options
Finance directly affects budget therefore it is important to know the difference between a fixed or linked interest rate.
  • Fixed interest rate: The amount will be higher at first but will remain constant.
  • Linked interest rate: The amount will be lower at first but will increase when the Reserve Bank changes interest rates. Your monthly car instalment will also increase.
The contract period can be anything from 12 months through to 72 months, remember that how longer the contract the more you will end up paying. Keep in mind that the amount that you put down as a deposit will also affect your payments.
  1. Any added extras
When signing the contract, you automatically sign for the car (invoice price), licensing, admin as well as any delivery fee. Then comes the value-added extras such as warranty, service plans as well as dent and scratch protection. There are products that can protect your finance, these include packages that will refund your deposit in case of any theft or major accidents or you can get gap cover insurance… there are many options.
  1. Insurance is key
You will not be able to drive the car without proving that it is insured. If you have an existing insurance policy bring the proof with you or if the dealership arranged your insurance make sure to get the document from them. If you do end up having an accident – you will be covered. It is compulsory to have comprehensive insurance on the car for the duration of the finance contract this ensures that your finances are protected.
  1. Balloon payments
Make sure that you plan this right otherwise you will need to take out a new loan to pay off the balloon payment. Balloon payments will make it easier in the beginning as your monthly repayments may be more affordable but you will have to pay a big amount at the end of the finance term.