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Tips on Vehicle Finance

With us, you can feel secure with your purchase and vehicle finance, because there will be no nasty surprises further along the road. 

2018-12-18

Very few things in life are as exciting as purchasing a new car. Driving it off a shop floor with its new-car smell can be intoxicating! People get lost in the excitement and lose sight of the long-term repercussions that hit home after that new-car smell is gone and the vehicle is starting to show signs of wear and tear and require maintenance. Vehicle dealerships offer their own brands of vehicle finance, and they may offer various forms of deal assistance to make the vehicle more affordable. 

What you have to remember is that they always recoup those costs somewhere along the line, so check the fine print of the sales contract and conditions thoroughly. Often they claim an outstanding amount of money in a large balloon payment from you once the financing contract is over in exchange for low instalments, and you end up having to refinance it, nullifying the advantage of the lower instalments. This is why you need to know how vehicle finance works. People are caught unawares, because they focus on the short term and forget about what happens in the medium to long term after purchasing the vehicle. 

Some things to remember when applying for vehicle finance include the following:

Be aware of balloon payments. They are not called balloon payments for nothing. When you apply for vehicle financing and someone offers you a deal that vastly decreases your deposit or your monthly instalments, a balloon payment usually applies. This means that, after you have paid off the vehicle for the stipulated time period, you have to pay the difference you saved in one payment. Most people cannot afford it and then have to refinance the outstanding amount.

Learn about interest. There is a wide variety of interest-related ploys. Sometimes your great interest rate lasts only for a limited period. Others guarantee that your interest rate will never change, but then they charge you a high interest rate to begin with. You must decide whether a fixed interest rate or a variable interest rate will be to your best advantage in the medium to long term.

Check your extras. Ensure that you know exactly what you are buying. Some dealerships will throw in some extras that you end up paying for in your monthly instalments. Remember, there are no free lunches. Ask questions, ask again, and ensure that you know exactly what you are paying for, how much you are paying, and when you are expected to pay.

Your best friend in the motor industry is a vehicle finance company that is completely transparent and will offer you the best deals possible with no hidden pitfalls to catch you out. BIB Finance is one of these finance providers. With us, you can feel secure with your purchase and vehicle finance, because there will be no nasty surprises further along the road. Give our team a call today to find out more about our vehicle-finance options and how we can help you to avoid the bad deals by doing business with an honest and transparent vehicle-finance provider.