From the moment you get the keys to your first car, there is something special about driving. The freedom it gives you and the sensation of being able to do what you want, when you want, is great. At first, any motor vehicle will do but when you get a bit more discerning, you start to look for a little more from a vehicle.
However, sometimes the car of your dreams is just a little out of reach, and that’s when life can get a bit frustrating. For many people, settling for a lesser vehicle just isn’t an option, and for a number of reasons. A car loan may be what the doctor ordered. There is a good reason why financing is lucrative option. Once you have repaid all the loan, the vehicle is yours. You have full ownership of the vehicle and that makes motor vehicle financing a great investment.
Financing makes affording a car easier for most people, but it’s important to come prepared before taking out a car loan. Here are a few things you should know:
- By spreading the payments over time, you can drive away in the car of your dreams and pay for it over time. When the payments are complete, the car is yours to enjoy or do with as you please, including selling it.
- Your credit score is the most important factor in determining how good of a loan you can get from a lender, especially with regards to the loan interest.
- It’s always best to be pre-approved for your loan before even going to a dealer, and that’s because a financing offer from a bank or lender guarantees that you have a loan to cover the cost of your desired car, giving you additional leverage in negotiating.
- The motor vehicle loan interest rate only has a small effect on the amount you pay each month. The total car loan amount you need, the size of down payment, and the loan repayment term are more important factors.
- During the loan period, the car is yours to look after. Because of this, you would have invested good money in an asset that is sellable at some point in the future.
Good investments are not always just about money. They are also about peace of mind and satisfaction. With the right planning, taking the financing route could result in you spending less on your vehicle.
Your car loan doesn’t necessarily have to be big, nor your loan interest rate high. Plus, you’ll be building a strong credit and finance history to carry with you for future transactions.
SOURCE: BIZNA KENYA