The convenience of having a ride whenever you need it is unmatchable. However, purchasing a car is one of the heftiest financial commitments that you’re ever going to make. Read this article for tips on how to finance the purchase of a new car.
Consider Your Credit Score
When it comes to the world of finance, your credit score is always among the most important things to consider. The higher your credit score, the more options that you’ll have when you’re financing a new car. You can check your credit score through online sites or request a copy from a reporting agency. If your credit score lies within the poor to the fair range, improving it before financing a car would be a great idea. This will allow you to receive better interest rates.
Determine Your Budget
You don’t want to fall in love with a certain car just to discover that it’s way beyond your budget. To avoid this from happening, you must set realistic expectations for yourself before you go car shopping. If you already have a car, it would be smart to search for a car that roughly matches your current expenses. If this is your first car, then you must come up with an affordable budget for your car. Make sure to account for interest and other possible fees that you might end up paying.
If your company provides a novated lease salary sacrifice scheme, then this would be a viable option. Novated leases are also known as car salary packaging. This is an arrangement that you can discuss with your employer. It allows you to use a novated leasing or fleet provider’s services to cover your work-related transportation needs. If most of your errands are work-related, then you should consider a novated lease as it would save you a lot of money. All you’d have to do is select a car and pay for it using pre-tax dollars from your salary. In that case, the car becomes a component of your salary package. Additionally, your employer will handle all the payments made to the provider from your pre-tax income.
Get a Lease
There are two general options when you’re financing the purchase of a new car if your company doesn’t offer a novated lease. You can either acquire a traditional loan or get a lease. Leasing is a lot similar to renting, as you will be returning the car to the dealership when your lease term ends. If you’re considering getting a lease, you need to think about how much you’ll be using your car and the distances you typically drive. This is because dealerships often charge an additional per-mile fee when going over the miles that the contract mentions. You may also have to pay a down payment, a security deposit, among other fees. If you have a high credit score, you will have access to better packages and leasing rates.
Purchasing a car is not an easy decision to make, considering that it’s a very weighty investment. If you don’t take the time to sort through your various financing options, you may struggle to keep up with the payments in the long run. Fortunately, this article covers some monetary tips that can help you out.