Buying a vehicle It constitutes one of the most frequent financial goals, but at the same time one of the most significant personal expenses and, therefore, with the potential to destabilize the finances of any mere mortal.
Hence the need to consider this idea very well before starting: carefully prepare your scenario and avoid taking action based on expectations with little support.
How to prepare? That’s what we’re going for.
Study your current scenario
That the impulse does not determine your purchase. Plan this purchase carefully. Initially, you should answer a few simple questions that will provide you with a more complete vision of your real possibilities of acquiring the vehicle and keeping it without dying in the attempt. You can start with these: Do you really need it? Do you have savings for full or partial payment? Do you have enough income for the purchase of the vehicle, fuel and maintenance? What sacrifices would you have to make if you acquired it to maintain control of your finances? What are the pros and cons of postponing the decision?
If in the end you decide to continue with the project, define what type of car you should buy considering your possibilities and needs. In this process, seek the opinion of trusted and knowledgeable people to make the best decision.
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Savings or loan?
As this type of purchase will always require a large initial expense, the first step will be to design a savings plan. The amount and duration of that plan will depend on the price of the vehicle you choose and whether you plan to buy it in cash or through a loan, and in the latter case, the proportion you plan to finance.
The ideal scenario is that you avoid indebtedness for the project of riding. However, credit for such high consumption is a very popular option, since it allows you to enjoy the asset in a shorter period of time and while your payment has not yet been completed.
Financial intermediation institutions can lend you up to 90% of the value of the vehicle. Keep in mind that the higher the amount requested, the more you will have to pay in interest and the higher your monthly payment will be. It is recommended that you finance the smallest proportion possible.
Our loan calculator can give you a pretty good idea of the amount you would pay each month for your loan.
The application for a loan includes the review of your history and credit score, so that the officers of the financial institution can decide if they will approve the financing. Therefore, it is important that you make sure to strengthen your credit profile.
Keep in mind that financial institutions set a limit to the age of the vehicles they will finance. Many do not grant loans for cars older than six years.
In the same way, check the interest rate of several entities, try to close a fixed rate contract to reduce uncertainty in the future and ask about the possibility of making extraordinary payments, since this flexibility will allow you to get out of the commitment in a shorter period of time and, therefore, therefore, paying a lower amount of interest. Keep in mind that some loan contracts pose penalties for early balances.
It also considers the fairs that financial entities hold periodically for the acquisition of vehicles. They typically offer more competitive conditions than those in force outside of these promotions.
About the characteristics of the vehicle
Before buying a vehicle it is important to determine if it will be new or used. In the first case, the chances of facing repair costs are much lower, but the difference in price can be quite considerable.
On the other hand, the choice of the brand of the vehicle will be essential because it involves aspects such as price, ease of access to parts and services, and the possibility of quick resale. These factors will affect its market value over time.
Seek, in any case, the guidance of someone you trust and with experience in the matter.
Do not forget…
-Try that your decision to buy a vehicle is not based on any type of social pressure, but on your real needs and possibilities.
-In addition to periodic maintenance expenses, you are required to take out insurance and pay current taxes for motor vehicles. Budget them.
-If you are interested in a used vehicle, it is advisable to have the advice of a trusted mechanic.
-It is advisable that you have a savings to make repairs in case it is necessary.
-We also recommend creating an emergency fund that allows you to cover at least three installments of your vehicle loan in case something unforeseen temporarily prevents you from generating income. This will give you a lot of peace of mind.
-In case you buy the vehicle from a particular person and not from a dealer, anyway, there is a legal and formal process that you must go through. Have someone with experience accompany you to minimize the risk of falling for scams or doing a bad deal.
-Finally, take good care of your vehicle and strive to buy good insurance. If it is the first one you acquire, it is also possibly your most important asset, so it will require a lot of care and responsibilities.
