Car Finance: 4 Tips To Avoid Being Ripped Off (a new way to buy a car)


Car finance can be very expensive if you don't bother to ask the right questions.
Here are 4 little tips that will save you money when looking for car finance.

1. What is the interest rate?

This is an important factor in car finance. In general, the total amount you will need to repay depends on how high the interest rate is, and how long the repayment term. Car finance interest rates can vary greatly from dealer to dealer. You can expect an interest rate from 9 percent up to 30 percent depending on the age of the car and your credit history. The interest rate can greatly affect the total price of your car loan so compare rates first before deciding on a dealer.

Factors that go into the interest rate formula include your age, your credit history, the age of the car, the make of car, the type of license you have, how long you have been driving for.

2. What are the penalties?

Dealers, like most lending institutions, charge certain penalties when you default on your monthly payment or when you do not stick to the terms of your car loan. You may even be hit with early repayment fees. This is when you pay off your car loan in full before the end of the loan term. Yes, you can be charged a fee for paying back the loan early!

Thorough research into car finance entails knowing these penalties, since these are also called hidden charges. By not asking about the hidden charges you might just find yourself paying more than what you intended.

3. What are the payments, and frequency?

Since you will be making the payments on your car loan, it is important for you to be aware of how many payments there will be, how often and how much. Ask the finance dealer if they allow flexible payment terms. i.e.. the flexibility to pay monthly instead of fortnightly. Your circumstances may change where a monthly payment scheme now suits you better than a fortnightly one.

Answering these questions before applying for car finance will help you plan your expenses and budgeting. You will need to manage your income so you will have enough funds to repay your car loan.

4. Is car insurance compulsory?

Some dealers require car insurance, a type of policy which takes over your car loan payments in case of unemployment, disability or death.

Ask if this is compulsory on your car loan and how much it will cost you. Most car finance dealers get paid commissions by the insurance companies when they sell you insurance. Car insurance is not always compulsory however car dealers will not disclose this to you unless you ask.

The goal in asking these questions before signing up for car finance is to avoid being tricked by your dealer and to get the best deal possible.

Do not hesitate to ask any questions you may have or clarify any doubts before signing your deal.

Obtaining car finance can be very easy. However for the inexperienced car finance can also be very expensive in the long run. Ask questions and build your own knowledge before signing any contractual agreement.

What To Do Before Buying That New Car Or Truck - Advice On First Car




Ooohhh, that brand new car smell...

It's so great isn't it? But it comes at a premium. We all know that it's cheaper to buy fairly used instead of new, but if you still don't think you can live without that fragrance of a new car (the real one, not the one you buy from dealerships in the little spray can) - then at least think about following these steps first:

1. Research! If you absolutely have to have a new car, do yourself a favor and spend some time at Nairaland.com cartalk section and research some of the cars that you are thinking about buying. If you have a specific car in mind already, be sure to research the other cars in its class as well. You might even find another one you like better and is rated higher from consumers, has higher crash test scores, better resale value, higher mpg's, or whatever else floats your boat.

2. Once you have decided on a car, lots of dealerships have a great feature for pricing - it's called True Market Value. That is basically how much other people are paying for that specific car. This can give you great leverage when negotiating the price on your new vehicle. But you also must keep in mind that it's not a definite price level, but more of a guide for haggling with the salesman about the price.

3. Dare I say the "L" word? Loan! There I said it, whew. Once you have settled on a fair price for the vehicle you are buying, it's time to think about how you're going to pay for it. Since most of us don't pay cash for new cars, most likely you'll need to obtain a loan for your new ride. If so, then you need to pay close attention to the interest rate on the loan. This is not something that can normally be negotiated, but you still need to be aware of what your interest rate will be - even 1 percentage point lower can save you over NGN700k on an average priced new vehicle, over the life of the loan.

My advice on this would be to go after those low APR loan offers that the dealerships sometimes have. You know, the "buy now and receive 2.9% apr for up to 60 months" type of offers. That can save you some big bucks, lets take a closer look...

Title: Auto Insurance For First Time Drivers - How To Save Money On Your Car Insurance


Tip 1: Give the car insurance company all details that they require. Details regarding your annual mileage, your car's safety features and installed equipment, zip code, marital status and your driving record would be needed to ascertain all the discounts you may qualify for. This will help the company give you the best quote possible. In the absence of these details, the insurance company will quote their highest price. This is just to cover themselves, so you can't wave it in their face later, if it turns out you're not an optimum risk.

Tip 2: To cover your car according to your needs, you may get insurance quotes that could vary up to 300%, meaning if one company quotes L1000, another may quote L3000 for the same car and the same coverage. Just by comparing quotes from various companies, you could end up saving hundreds of bucks annually. Even your old car insurance company may be offering lower rates to new customers. You can negotiate the same deal for yourself.

Tip 3: If there's anyway to reduce your annual mileage, do it. Most companies have discounts for cars that do less than 40 miles a day on an average. Travelling by train or flying for vacations can also help reduce miles on your car. This will cut a lot of precious Naira off your insurance quote.

Tip 4: Switching drivers could be a good option. A few more quid could be shaved off the insurance quote, if a female driver drives a truck or a male driver drives a minivan. Teenage drivers need to be insured on a family car or a sedan instead of a sports car. Ultimately the insurance company looks at the risk of covering your car. The lesser the risk, the lesser is the car insurance quote.

Tip 5: Bump up your 'excess'. In Nigeria you may be at liberty to increase the amount you'll pay in the event of a claim, before the insurance company stumps up. If the minimum they ask for is L100, but you volunteer L500, your premiums can be lower.

Tip 6: Get 'third party fire and theft' on older cars. Old Bessy is not worth getting 'fully comp' on. Three years of fully comprehensive may be worth more than the car itself!

Tip 7: Buy a mediocre car. A smart car is a thief magnet, and is usually more powerful. Drivers are likely to drive more recklessly in a sports car. Some are expensive to repair. These factors cause the premium to be higher.

Do your research before you buy. Before you buy a new or used car, check into insurance costs. Premiums are based in part on the car's price, repair costs, its overall safety record, and the likelihood of it being stolen.



MORE TIPS COMING ON:

Auto Insurance For First Time Drivers - How To Save Money On Your Car Insurance...

Fantastic post OP.

Well done bro. We are waiting!

Ikenna351:
Hi all,

I realised there is a need for us to have a thread where we can say it very loud. Hence, the creation of this room.

In this room, we can derail as much as we want, discuss off topics, etc.

But please, no derogatory words, sales, adverts, spams or posting. Other than these, fire on!

*Note that this room is not for posting our normal car issues and seeking solutions for them. We have the entire section, outside this room, for that.

Moderator.

Thanks Ikenna for this thread. So much info to lay hands on.

I also found this article very helpful Best Car To Buy As A First CAR – As Your First Car: Car Buying Tips For First Time Buyers (Advice On First Car)

Here is the link:
https://dailysteer.com/best-car-to-buy-as-a-first-car-car-buying-tips-for-first-time-buyers-advice-on-first-car/
https://abetterwaytobuyacar.dailysteer.com/




You can also do well to check out this nairaland thread: https://www.nairaland.com/4769366/best-car-buy-first-car


God bless.

honeymix77:
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What do you think about this article, it has pulled lot of comments Best Car To Buy As A First CAR – As Your First Car: Car Buying Tips For First Time Buyers (Advice On First Car)

Please check it out, the link:
https://dailysteer.com/best-car-to-buy-as-a-first-car-car-buying-tips-for-first-time-buyers-advice-on-first-car/
https://abetterwaytobuyacar.dailysteer.com/


Here is a similar thread on Nairaland: https://www.nairaland.com/4769366/best-car-buy-first-car


Thanks and God bless!