"carwitter" (carwitter)
11/06/2016 at 20:34 • Filed to: car finance, finance, top 5, mistakes | 0 | 8 |
Thought this might be helpful for some of y’all as car finance now accounts for nearly 80% of car sales!
1. Paying a deposit via credit card
All car finance packages ask for an initial payment up front. This can be from a few hundred pounds to 3 or even 6 month’s worth of payments.
Some can afford this, especially if you have sold an older car and still have equity in it. But for more prestigious brands and higher worth cars the down payment to secure the finance can be a few thousand pounds.
Yup, it will get you into that low monthly cost but if you leave a three grand lump sitting on your credit card you need to factor in those monthly payments too.
Try and avoid it at all cost.
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2. Search around for the best rate
It takes time to find the lowest APR and cheapest monthly cost. There are so many leasing companies out there nowadays, with each offering slightly different terms, maintenance, insurance thrown in, mileage rate.
It can take an awfully long time to choose what you believe to be a good deal. Later you may find that wasn’t such a good rate, and you could have got so much more for your money.
Using a service like !!!error: Indecipherable SUB-paragraph formatting!!! would take that worry away. They use third party brokers who know the market really well and scour it for the best rates available for you.
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3. Knowing your budget
A brand new Audi for £280 a month may seem like a good deal. You can stretch to that. But what if your circumstances change after a year? Your rent or mortgage goes up, another unexpected payment comes into your life and makes your then struggle to keep up the payments. You then end up resenting that nice, brand new white Audi you were so excited to lease a few years ago.
Make sure you’re comfortable making those payments. Don’t stretch yourself, it’s just not worth it.
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4. Test drive before committing
You’d be surprised by the number of people who fall in love with the looks of a car before even test driving one. Especially in today’s time precious world you can lease a car online without ever having driven it. It’s a good idea to try a few different engines and check out the varying trim levels in person, get a feel for the car and its practicality. Can it do everything you ask of it?
If you are one of those people who buys before you try, it’s worth opting for a company that allows you to hand the car back within the 14 day cooling off period. It’s rare to find such a service, but handy if you decide you really do hate it after it arrives on your drive.
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5. Knowing your credit rating
What’s your !!!error: Indecipherable SUB-paragraph formatting!!! …exactly.
The majority of people don’t know this. If you score poorly your payments and deposit will be higher and the cars on offer for your budget will be limited.
So there’s no point in setting your heart on the car of your dreams until you have checked this out, or been approved credit.
Many of the online brokers can give you an instant decision when you apply online, that also saves you the hassle of filling in paperwork at the dealership, the awkward ‘sorry but it’s a no’ – they do the majority of the form filling so you don’t have to.
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E90M3
> carwitter
11/06/2016 at 20:41 | 6 |
What’s wrong with putting a deposit down with a credit card? I did and it just became part of my down payment. If you are going to put money down anyways, as long as you’re going to pay the card off when the bill comes due, there is no difference between using a card or a check.
Decay buys too many beaters
> E90M3
11/06/2016 at 20:44 | 4 |
Hell I’ve bought vehicles on credit cards that I was planning to buy with cash. Those rewards become real money with big purchases.
InFierority Complex
> E90M3
11/06/2016 at 20:46 | 2 |
I think it is talking about using a credit card when you don’t have the cash to immediately pay it off. So instead of a down payment and a car loan, you would have both a car loan and have to pay off a couple thousand in credit card debt as well.
Dr. Zoidberg - RIP Oppo
> carwitter
11/06/2016 at 20:50 | 1 |
1, 2, 3, and 5 all revolve around whether you can truly afford a car or not.
4 is actually about the car itself.
Here’s my revised list:
1. Do you like the car?
2. Can you afford the car (from the perspective of a properly educated adult with some knowledge of math and finance)?
3. *Should* you buy the car?
E90M3
> Decay buys too many beaters
11/06/2016 at 20:53 | 2 |
The rewards can add up, I paid for my iphone 6 with the cash back I had on my card.
E90M3
> InFierority Complex
11/06/2016 at 20:55 | 2 |
I think the statement then needs to be: 1. Paying a deposit via credit card, and carrying a balance.
Urambo Tauro
> carwitter
11/06/2016 at 21:11 | 1 |
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I’m not convinced that all of these are mistakes.
TheBimmerGuyWhoNowOwnsAChevy
> carwitter
11/07/2016 at 02:04 | 1 |
Little fun fact I learned a few weeks ago, (not sure if it applies to cars but definitely houses) but when you go to ask for financing details and they check your credit score, it brings it down a few points, so try not to do that unless you are serious about buying it.