Practical tips when buying a vehicle
Common mistakes when buying a vehicle
These are some of the common mistakes you should avoid making when buying a vehicle:
Trying to fit the loan to the vehicle
A common mistake when buying a car is trying to stretch the loan duration in order
to afford a more expensive vehicle. Avoid taking loans with a very long duration since your
early repayments won’t reduce your interest costs.
Underestimating the total cost of ownership
Make sure you take into account all costs associated with buying a car and also using it including petrol, toll, insurance, road tax, parking, and maintenance costs. Check out our article: what vehicle can you afford to buy?
Not shopping around for your loan
As with all loans, make sure that you speak to a few different banks and money lenders to compare the interest rates and terms offered. The lower the interest rate, the better. Remember, if it’s a flat rate being used for your loan, the effective interest will be almost double that rate. Also, check out how the bank calculates your early repayment options.
Rushing into a purchase
Sometimes you might be tempted by things that don’t really matter in the long run. Maybe a dealership offers you a lot of freebies that they claim is a one-time offer and you start to feel pressured into making a quick decision. Don’t! Stay focused on the important points like what you need the vehicle for and how much you can really afford to pay for it.