Guiding consumers since 2009

What you should do before getting a car loan

By Staff Writer
When you take out a car loan, which can be a three- to five year commitment you need to be ready to take on that kind of responsibility warned Wesbank in a statement this week. The car loan will be your responsibility, until the full amount owed to the bank is paid off. 
 
So what should you be aware of before you take on a car loan? According to Wesbank, you should: 
 
Apply for a car loan that is within your budget and make provision for all the mobility costs (petrol, maintenance, comprehensive insurance and car washes).  
Make sure you saved enough to put down a big deposit. Such deposits give you room to negotiate and usually you can knock money off the purchase price. It also means you end up borrowing less from the bank, and you pay your car loan off sooner.
Maintain a good credit history. Always pay your loans and bills on time. The bank looks into your credit history to make sure you are a good borrower.
If you are looking at a used car, consider extending the warranty or service plan to ensure you are covered once the current plan expires.
 
Wesbank also warned that you shouldn’t:
Be tempted to go above your car-buying budget. Your loan has a higher chance of being rejected because the bank can see that you can’t afford the monthly car instalment.
Be embarrassed about going for a cheaper or used car. A small car is the first step to one day owning your dream car. 
Apply for a car loan just after starting a new job. Rather wait for a couple of months, as this helps to increase your stability status. This counts in your favour when applying for your car loan. 
Increase the length of your car loan unless money gets tight. The quicker you pay back the loan the less you pay in interest. 
 
To check if you can afford your car loan, Wesbank has a handy vehicle repayment and insurance calculator. Click here, to see if you would qualify for a loan and what your repayments are likely to be.
 
 
  

Recent Articles

Featured What does it mean to be a registered Financial Services Provider?

You may have noticed that financial institutions state that they’re registered Financial Services Providers (FSP). But what does this actually mean, and how does this benefit you as a consumer?

Should the retirement age change?

Across the world, people are retiring later than they used to. However, retirement products are centred around set retirement ages at which point you’d be able to access your retirement savings. But how applicable is the current retirement age in South Africa?

Everything you need to know about wills

Death can leave a lot of confusion and chaos. What happens to your possessions when you die can have a profound effect on those you leave behind. But you can soften the impact by drawing up a will.

Young professional? Set up your personal finances for long-term success

As a young professional, you may have just started your first job and become financially independent from your family. This is a unique financial position to be in. So how should you arrange your personal finances for long-term success?

Deals

Get 30% off your gym membership with Absa student account

Price: Available on request
When: Daily
Where: Nationwide

Get 10% discount on Rentalcars.com

Price: Available on request
When: Daily
Where: Worldwide

Get up to R5 back in rewards points when buying fuel

Price: Available on request
When: Daily
Where: Nationwide


Latest Guide

Guide to debt rehabilitation solutions