According to Moneyweb, new car sales figures for February 2019 decreased by 13,3% from February 2018. With consumers increasingly feeling the financial pressure derived from rising costs and increased inflation, it is important to carefully consider your options when looking to finance a car. Here are three options that you can explore:
You can opt for vehicle financing from a bank or other financial institutions where a number of car dealerships will help you to apply for vehicle financing. The major drawback of vehicle financing, however, is that it is subject to high interest rates which may increase further in the future. You will also be incurring an additional line of debt, which you will need to budget for.
One of the reasons why a number of people avoid vehicle financing is due to the lengthy approval process from banks. If you have been blacklisted in the past or don’t have a solid credit history, banks may decline your vehicle finance application.
Use your Access Bond to Pay Cash for the Car
The interest rate on a mortgage at FNB for example, is approximately 10%, which is less than the interest rate you will have to pay if you obtain vehicle financing from the same bank. Consumers can access prepaid funds on their home loans and pay cash for a car, which can be a good option seeing that you will pay a significantly lower interest rate.
With rent-to-buy vehicle financing, you won’t be incurring an additional line of debt. With this type of vehicle financing, you will need to make an affordable rental payment each month until you own the car. All you will need is the following:
- Proof of income,
- the ability to make an upfront payment of approximately R16 500 (which is an administration fee),
- the ability to make a monthly payment of between R4 000 and R5 000, and
- you will have to meet Earn-a-Car’s simple requirements.