You’re done with school, you have your degree or diploma, and you’ve landed your first job. Now it’s time for a set of wheels – how exciting!
In the past, many young people had the privilege of having their first car bought for them by their parents… but times are a –changing, and this may no longer be the case. Chances are, you’re going to have to arrange your own car financing which can be really daunting if you’re just starting out.
These tips should help you navigate the waters of vehicle financing as a first time buyer:
Set a realistic budget
When you first start earning your own money, it can seem like the world is your oyster. Bear in mind however that living expenses are, well, expensive. Be realistic about how much of your salary you can afford to spend on vehicle financing.
Take into account hidden costs
The monthly cost of owning a car includes more than just the vehicle repayment. There’s also insurance, servicing costs and of course petrol. Many vehicle finance companies (including Earn-a-car) actually include some of these costs in their monthly payment plans – so do your research thoroughly when comparing prices.
Don’t be blown away by bells and whistles
Nobody actually needs a fancy car, it’s just nice to have if you can afford it. Your first car doesn’t need to be ‘cool’ – it needs to be reliable. A pre-owned vehicle is probably a better option than a new one, so long as you buy it through a reputable company.
Arrange the best financing you can afford
It can be hard to find affordable car finance deals when you don’t have a credit record yet, which basically amounts to the same thing as poor credit. Getting car finance with bad credit is not impossible however; there are financers who will approve your application so long as you have permanent employment and can afford the monthly payments.
Shop around for insurance
These days insurance is a must, but it can be really pricey especially if you’re a new driver. Most insurers have higher rates for drivers under the age of 25, so you’ll probably have to shop around for the best deal. If you don’t see yourself driving very long distances – i.e. you’re just travelling between work and home, and maybe visiting friends nearby – consider pay per kilometer insurance schemes. These can save you a bundle if you don’t drive a lot.