There are many different vehicle finance options in South Africa, but not all of them are a good idea. Earn-a-Car, leaders in the rent to buy industry, has rounded up some of the worst ways to finance a car:
Years and years of payments
Many times, car buyers are coerced into taking out a loan over 5, 7 or even 10 years. On the surface, the repayment options may seem more affordable but in the long-run, you will be paying much more for your car. The interest on car repayments is much higher than the interest you would pay on a mortgage and these costs can become astronomical if you take many years to pay off your car. It’s always wise to try to pay off your car as quickly as possible.
Not shopping around for different quotes
If you have been banking with the same bank for many years, then it’s natural to assume that you would want to finance your car through the same bank. Don’t accept the car loan rates that your bank offers you before shopping around. Many times, a competitor bank will offer you a better deal and this can save you a lot of money in the long run.
Accepting bad terms from a dealer
If you have been blacklisted or are struggling to get a loan from a bank, you may find that certain car dealers are willing to offer you a ‘special agreement’. More often than not, these deals include very high-interest rates and you would be better off with a pre-negotiated car loan or a rent to buy car financing option.
Need more information about vehicle finance in South Africa and rent to buy options? Then contact Earn-a-Car today.