For many persons, buying a motor vehicle for the first time, the process can be daunting. In reality, it’s not a difficult process at all. Here are some thing
First step- get a licence
The first thing you want to ensure that you do prior to buying a vehicle, is to obtain your driver’s licence. Some people may say that goes without saying, but it is really the first step. While you can obtain insurance on a vehicle as soon as your licence is three months old, it is also advisable to wait until your licence is at least one year old, as this could reduce your insurance premium significantly.
Have a budget
You should save and have a budget for how much you intend to spend on the vehicle, as most times, there are costs outside of the loan itself.
Although some financiers may bundle the first insurance, licence and fitness of a new vehicle into one cost, which is then rolled into your loan payments, others do not; and therefore, the buyer may need to come up with a deposit based on: the year and value of the car, insurance fees, licence and fitness costs
Decide on the vehicle that you want
Think about your budget as well as what you will be using the vehicle for. Do you want a car, a Sports Utility Vehicle or a pick-up? Choosing the type of vehicle that you want will also help you to narrow down the brand and models that you are interested in. Ensure that the vehicle you choose meets your needs.
Choose your financing carefully
Depending on the financier and the year of the vehicle, persons may be able to get 100 per cent financing and the option to combine the auto loan and insurance payments into one monthly payment. You also want to shop around and get the best interest rate and overall offer based on your needs.
Documents you’ll need
Most financial institutions will ask for more or less the same documents, to start the auto loan process.
These include a valid government-issued identification, taxpayer registration number, birth certificate, proof of employment, or an income verification form, last three payslips, proof of address, a pro-forma invoice from the car dealership, proof of deposit where applicable, motor vehicle valuation report and a copy of the certificate of motor vehicle fitness, to name a few.
A few costs you should know about
In addition, you would likely need to have a credit check done and this is usually at a cost to you.
The credit check is a critical step in the auto loan process, as it determines the individual’s eligibility for the loan and the maximum amount that a customer will receive.
Another cost, which you may have to pay for, is the processing fee, which varies across institutions; as well as a legal fee.
As long as you are prepared and take the right steps to owning your own vehicle, you should be alright. Happy car hunting and drive safely!
