It’s hard enough to buy another car, but if you don’t have enough money you will want to borrow to still be able to purchase your dream car. But when it comes to loans, there is a lot of choice, a lot of choice and I can well imagine that you will no longer see the forest for the trees.
Because which car loan will you apply for? Is that at the dealer where you buy the car, do you go to your own bank, or do you search the internet for the best offer.
Borrow from the car salesman
It is often not wise to take out a car loan with the company where you also buy your car. These often use a higher interest rate than usual and yet many people use it because it is so easy. But beware, because a difference in interest of only 1% already makes a big difference in your monthly payments.
Online quotes to compare
Think in advance of the amount you want to spend and already request some online quotes. These are without obligation and you do not have to use them. This way you can get a good insight into what the current interest rate is at the moment. A quotation often has a limited expiration date. However, if this has expired, you can request a new one after making your choice.
Pay extra with another lender
Of course, you should also pay attention when buying another car. Make sure you do not have to pay extra if you have your new car financed elsewhere. It may be that the seller has trusted part of the profit on the car that you also take out a loan with the same company.
Which credit are you going to take?
The credit you are going to take depends on your needs. If you do not incur any costs and if the amount is completely fixed, then you opt for a personal loan. If you expect to incur costs later, or if you just need some extra money, you can opt for revolving credit. Much has been written about these differences on Angie Feb and you can, therefore, study the differences between the various credits.
Do not buy a car that is too expensive
Pay attention to your budget when buying another car. When visiting a car dealer, it is very tempting to buy a much more expensive car than you originally intended. Once arrived at the garage you will be delighted with beautifully polished cars where one is more beautiful than the other. But of course they are also becoming more expensive. Set an amount and only marginally deviate from it.
How much are you going to pay per month?
You can also find out for yourself what you can miss a month on a car. Make a list with all the expected costs. Then you are talking about variable costs, such as maintenance and repairs, and you are talking about fixed costs, such as motor vehicle tax, insurance and depreciation. In this way you can get a good insight about the costs that you can expect per year. Divide this amount by the number of months and you know what you will lose per month.
Pay attention to insurance
Insuring your new car also plays a role. When financing a relatively new car, it is often a requirement that you insure this ‘all risk’. Of course this requirement only applies if you have to take out a loan for it. The lender wants to prevent you from having to pay off for years while the car has suffered irreparable damage. Something to take seriously into account, because the difference between a normal liability insurance and an insurance that covers all damages is considerable.
Adjusting the car
If you are going to change or purchase additional items after purchasing, you must already process this when applying for a car loan. Think of new rims, a nice navigation system, an expensive car radio, etc. This usually works well and if you do not apply for sufficient credit, you will have to pay this from your own pocket.
Used or new
Do you opt for a new car without mileage on the clock, or do you opt for a car that has ‘the head’ off. This means that a car of 1 or 2 years old is often a lot cheaper than a brand new one. If you have a reliable car dealer who knows what he is doing then he can be no problem to choose a car that is not new. This can really save thousands of euros and is certainly worth the effort to include in your search.
Arriving at the last tip I would like to talk about the period in which you will use the car. Normally, the provider of the loan would like you to pay off before the car is fully debited. This is usually a period of 5 years. The car may not be that old that it probably won’t make it to the 5 year old. Here too it applies that people want to prevent you from being left with a repayment while you no longer have the car.
Car loan: tips and direct calculation and application
I hope you benefit from the tips given. But then of course we are left with the question where you can then calculate and apply for a loan. Calculating is especially important because you immediately get an insight into the amount of your loan. On the basis of this you can then see whether the car you have in mind is a realistic image.