What to consider when shopping for the best deal

What to consider when shopping for the best deal

The automotive sector has endured sustained pressure for several months now, fueled by the relatively high cost of vehicle ownership as a result of increased fuel prices, significant inflation, and high lending rates, among other factors. The impact has been felt across the board, including the budget and premium segments.

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If you are in the market for a new car, it’s important to equip yourself with all the information available to help you get the best deal when approaching lenders to finance your dream car. This begins by building and maintaining a good credit record and credit score. A customer’s credit record and credit score, obtained from independent credit bureaus, are the first variables lenders take into account when reviewing a vehicle finance application. These have a bearing on whether the application will be approved and the interest rate that will be applied to the deal. This makes it vital to maintain a good credit record, even in tough economic times. 

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Instead of defaulting on payment on any existing credit account, it’s best to approach the lender to arrange payment terms. In most cases, lenders have facilities in place to help customers who run into financial problems to ensure they can continue servicing their debt.  

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The next set of factors that lenders consider when reviewing a vehicle application is referred to as asset risk. These include variables such as the price of the vehicle in relation to the applicant’s disposable income. This is why it’s important to shop for a vehicle within your means and temporarily hold off on that dream car. Even choosing a less premium brand or going for a more budget-friendly option are ways to make a better motoring decision. 

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Cars can be captivating machines, and the urge to acquire something powerful or visually appealing can be difficult to resist, but it can lead to more problems than smiles. A vehicle that you look good in may burn a hole in your pocket. Whereas a reliable and affordable grocery-getter might never let you down and be exactly what you need for this season of your life. A good financial decision now, particularly around your motoring lifestyle, might be the next step to comfortably owning your dream car or even better.

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Other key factors that are considered at this stage include the contract term or finance period, whether a deposit is paid, if a balloon payment option is chosen, and other factors pertaining to the deal structure. Demographics such as race, age, and gender are collected for regulatory statistical purposes, but they have no bearing on interest rate calculations or the final outcome of an application. 

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Even when your vehicle finance application is approved, don’t settle for the first finance offer that’s put on the table. Shop around and compare what different lenders can offer. If the terms are not favourable or the price doesn’t align with your budget, be prepared to walk away. The cardinal rule for buying a car is patience and persistence. Remember, there are always other cars and financing options available. Your dream car might be just around the corner.

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