Secure tips when buying a car with a car loan

Image: bloggers.com 

 The purchase of a motor vehicle with financing through a bank or financial institution is preferred by consumers worldwide. Car loans are considered easier for consumers to obtain the desired car. By providing down payment and  income/salary information, consumers can drive a dream car. At first glance, the theory is simple. You can choose a bank or finance company that provides car loan services.

Determine what kind of car of your dreams. Make a list of cars that you like. Please Always up-date with the latest information about the car that you desire. If this car for family needs, adjust the type of car with the number of family members, and your family needs.

Calculate the price and car loan payments that you can afford. You also have to take into account the high price of fuel a car when choosing the type of car that fits your pocket. If you intend to buy a car on credit, taking into account the mortgage that suits your ability.

Here are simple tips in order to finance a car loan stay safe:

1. Avoid down paymen with loans

You should not be tempted by a low down payment when you are looking for car loan. Very nice if the down payment is 10 percent above the minimum requirement. One more thing you should avoid is, do not use borrowed money from the bank, or financial institution to increase the down payment. Because, if that happens, just say you have two installment obligations, doubled. This is not a wise decision.

Image: money.howstuffworks.com

Remember this important prescription, the greater the down payment, the more you have the opportunity to choose the amount and tenor of the mortgage or loan period. Do not let the car due to a forced loan, making monthly family financial flows into halting. If you have a sufficient down payment, you should be patient, wait for your money to be enough.

2. Select the appropriate source of financing

So far, there are two common institutions provide financing and working with dealers selling cars, the banks and finance companies. Each has advantages and disadvantages. In general, banks usually set the interest rate are smaller than the leasing company (financial institution). Only, terms and loan approval process of a bank is much more stringent, and vice versa.

Banks are also more compromises if you are having trouble paying the mortgage. Possibility to reschedule or restructure loans is much more open.

Therefore, the bank placed a high priority item, and a new finance company. When the showroom where you would buy a car was does not give banks and multi-choice, you should leave it.

3. Choose a car as needed

Do not buy a luxury car with a loan. Buy a luxury car if you have a down payment of more than 40 percent, and you have a large and regular income. Please choose the type of car that you and your family need. Type of car will play an important role functions, especially in terms of passenger and luggage capacity.

This should be discussed with other family members. Do not ever put prestige rather than function.

Image: zigwheels.com

4. Price surveys

Once you decide what kind of car you want, the next step is figuring out what the best price offered. May be obtained by asking for some dealers who issued the kind of car you want.

5. Make sure the tenor not exceeding the age of economical cars

Having determined the amount of money that reaches 30 percent of the selling price of a car or so, the next step is to set the tenor or the loan term. One thing you have to remember, choose a tenor who did not exceed the period or economic life of the car.

Because, when you have more than four or five years, you have a lot of extra money for repairs. The age of the car at the age of five years is a period of improvement. In fact, you still have to pay the mortgage. So, your expenses must be twice as much.

6. Selecting the interest rate

There are a few things to be learned about the interest rate on the market in both the banking and financial institutions. Technically there are two types of mortgage interest rates, fixed interest rates (flat rate) and interest rate (floating rate).

Image: prlog.org

Discuss well each item of car loan agreement, and do a question and answer with the finance company or bank staff before you sign the loan agreement, so you understand all the terms and conditions. 

7. Provide a reserve fund for risk

Even if you can afford the repayments exceed the minimum and advances above 30 percent, you should also think about the possibility of risk when financial difficulties. Therefore, in addition to repaying the car, you should still set aside a portion of income for special savings in the event such risks.

Another way is to insure your car with all risk protection. Indeed, there seems to be additional new fees, however, if you look, it would be much more profitable than without insurance. You must be prepared to risk missing car, incidents on the highway and the risk of natural disasters. Insurance coverage is very important.

If you are wise when looking for a car loan, then you've done a nice step in financial planning. If you do proper financial planning, you will be free from financial problems in the future.

Enjoy your new car. Drive safe.