Vehicle Finance – How Can It Be A Great Way to Own A Car?

by Alfie Davies Financial Manager

Vehicle finance is a term that refers to a personal car loan either from a bank or any other financial institution. Vehicle or auto financing can allow you to acquire a car, even if you do not have the money. You can borrow from a reputable loan provider and then purchase your own car. Most of the vehicle finance companies in South Africa offer a wide range of finance products.

Advantages of Vehicle Finance:

When it comes to buying a car, vehicle finance can benefit in several ways. You can easily get the loan of the maximum value of the car.

Customised EMI Plan

If you take a car loan, you can get the option to customise your EMI plan, as per your ability to repay. You can calculate your monthly expenses and pay your loan EMIs conveniently by choosing the flexible tenure.

Convenient Collateral Option

The vehicle you are buying is termed as the collateral when you get a car loan. You are not required to serve any other property as the additional security. It eliminates the chance of reprocessing of any of your assets in case of your inability to repayment.

Easy Eligibility

In the competitive market of the financial industry today, the customers derive the benefit of easy eligibility. All you need is have a stable income and good credit score to get a car loan. There are no additional eligibility criteria.

Simple Procedure

The entire procedure of documentation and loan approval is easy and simple. It takes less than a day to complete the steps and getting approval.

No Additional Expense

Most of the car loans today offer to finance up to 95% of the car on-road price. It eliminates the requirement of spending money on accessories, insurance and registration. The advantage allows people with low finance to own car.

With these advantages, you can get a car loan and enjoy the flexibility to repay the amount. You can get a car finance, even if you have money so that you can spend your savings when any emergency arises. However, you need to consider a few factors while getting a loan.

Considerable Factors for Vehicle Finance:

Comparison of Interest Rate

Before opting for a moneylender for your car loan, it is necessary to compare the interest rates offered by various companies. A small difference in the percentage of interest can make an enormous difference in the amount of repayment. Your car dealer can help you get various quotes on interest rates from different lenders, as the dealers have tie-ups with the loan providers. Then it will be easier for you to compare the rates of interest and get the best deal.

Wise Choice of Repayment Tenure

Setting the loan repayment term is another necessity while going for vehicle finance. Although you can enjoy the flexibility to choose the tenure, you can select it carefully. The longer you take to repay, the greater the amount you need to repay. By opting for the minimum loan repayment tenure, you can save a lot of money in the long term.

Proper Documentation

The moneylenders approve car loans by ensuring complete and verified document submission. With proper documentation, you can get immediate approval and a pre-approved loan will help you buy the car in a hassle-free way. The faster processing or the pre-approval of the loan will also help you eliminate some add-on expenses and fees.

Calculation of EMI and Add-Ons

Various loan-finding websites offer easy EMI calculators to help you plan the monthly EMIs based on the interest rates. Apart from the EMIs, processing fees, service tax and a few other charges are accompanied by a loan. You should look into these charges before choosing a lender. Besides, you should be aware of the foreclosure clause that includes penalty charges before getting a loan. As different lenders have varied charges, you can take a wise decision with this information.

Analysing Schemes and Offers

Banks and other financial institutions that provide car loans, come with attractive deals and offers often. If you have a good credit score, you can get customised deals. In some cases, a 0% finance scheme on the amount of car loan is offered for such customers.

An updated credit report and a good credit score can also give you the upper hand. However, it is crucial to be aware of the above-mentioned factors to secure vehicle finance from a renowned company. Along with undergoing thorough research on diverse finance options available in the market, you can also seek help from an authorised car dealer. With a great effort, you can acquire the best deal of vehicle finance and enjoy owning your dream car.