Most people dream about owning a particular car (scratch that – most men!), at least at some stage in their lives. However, most people (men) give up on the dream of ever owning that dream car once they get married, have kids, and settle down.
Whether that’s because they no longer have the much-coveted independent lifestyle whereby they were free to pick and choose. Or, whether it’s because they now lack the cash flow given that every penny earned goes toward the mortgage, the diapers and baby food, and the electricity and water bills.
Tough life, right?
But your desire to own your dream car can still become a reality. And you’d don’t necessarily have to wait until you’re 55 years of age when the kids have fled the parental home and are now no longer your financial responsibility. You simply need a car loan in order to achieve the feat, and in order to get a car loan, you need a deposit.
That said, here are three insights on how you can begin to save the deposit and by doing so, you’ll finally make your dream come true.
In an ideal world, we would buy every car with cash. However, oftentimes that’s entirely unfeasible. So, instead, you should opt for a low-cost loan. Before you do, though, be sure to calculate all the costs accordingly.
- Stick to your budget
You need to figure out how much disposable income you have available at the end of each month. Figure out what you need your income for – rent/ mortgage, bills, food, et cetera. Then, list down those monthly ‘necessities’ that may not be so necessary – cut down on the expensive coffee, reduce the number of ‘entertainment’ evenings, no more exuberant holidays for a while, get the cheaper diapers – the baby will never know (though the wife will be keenly aware).
You’ll now be able to determine the percentage of your income which can be used to make repayments on a car loan.
Every money lender, irrespective they deal with mortgages or they deal with car loans, bases the amount they are prepared to lend you (the principle) on what is known as an affordability test; albeit affordability tests are more commonly used for mortgages.
If you are devoid of enough disposable to generate the necessary minimum monthly repayments, then, sorry, but you will not get the loan this time.
Once you’ve figured how much you have available each month, you can utilize an online calculator to assess just how much you can safely borrow, how long the repayment period will be (the term), and the tally of interest you’ll need to pay, too.
- Be Wary of the Number of Loan Applications you Make
Be aware that the more loan applications you make, the more it will reflect on your credit score. And it does not reflect in a positive light, either.
How many times is too many?
There’s no rule in place for this since every lender has a different set of criteria to satisfy.
The fact is that if a lender sees you’ve had credit in the past, irrespective the form of credit it is, they’ll be more likely to loan you the sum you are in need of, given that your credit is in good standing.
And the fact is, if you’ve not applied for credit previously, lenders will have no information available to work with, and again, they will be less likely to furnish you with a loan.
- Get the right finance
You’re now searching out a loan for your dream car. But don’t be tempted to jump at the first offer made. Instead, shop around. Consider it a product, like you would a new TV or computer.
You’re the customer. You want real value for money, and you also want superior customer service.
If you’ve faced problems in the past with finance applications, you may need a specialist lender, one who can draw from the resources of a variety of lenders who tend to be more flexible and whose financial products are better geared to your requirements.
Irrespective you don’t actually have bad credit, an auto finance broker can undertake the legwork for you, thereby saving you a pretty penny by negotiating loan rates and terms.
You’ve got the car, now you have to manage the on-the-road financing. Be sure to get the best deal on cheap car insurance.