It is exciting to buy your first car, but before committing to a new ride, you need to make sure you have ticked all the boxes and consider all the factors, especially in terms of affordability.
You don’t want your first car to be one that you ultimately can’t afford. The car you are paying for goes beyond just the instalment, so make sure you tick all the boxes when you are buying your first car.
Find the Best Vehicle Finance
The first thing that you will need to do, is to find out the amount of vehicle finance you qualify for and then find the best interest rates. Once, you have completed your vehicle finance application, you will have a good idea of what type of car you can get and the monthly instalment you can pay.
You Will Need Insurance
When buying a car, you need to take into account insurance. Comprehensive insurance is the best car insurance to take as it will cover third parties and damage to your vehicle. Comprehensive insurance is the most expensive type of insurance, but as with anything, you should shop around. Get a few quotes from different insurance providers for the vehicle that you would like to buy.
You Need to Fill the Tank
Petrol is something that you can’t avoid and it is expensive, which makes it a priority when looking at affordability. You need to think about the fuel consumption of the car and how much travelling you will do. Calculate how much it would cost to fill the tank of the car that you would like to buy and on average how many kilometres you will get from a tank. This will give you an indication of how many times you will need to fill up in a month.
Service and Maintenance Plans
When buying a car there will also be service and maintenance plans. New cars usually come with a service and warranty plan, but if you are going the pre-owned route some of these cars will be out of their service and maintenance plans. This means that you will need to do some research and find out what these plans cost.
Service and maintenance plans are important as these assure that you will not need to pay for expensive fixes and services out of your pocket.
Credit Shortfall Cover
Once, your finance application is approved, you will need to pay the provider the car amount plus interest, which can be quite a bit. If your car is stolen or written off then you may find there is a difference between what your insurer pays out and what you owe to the finance provider. Credit shortfall cover will cover this difference so you aren't left out of pocket.
Your insurer will pay the market-related value for your car, which could be a lot less than the amount you owe to your finance provider. Shop around for credit shortfall cover to get an idea of what you will need to pay for this.
Add up all the expenditures related to buying a car and see if you can buy your dream car. If not, then you have a new goal. But for now, rather look for a different car now that you can afford.