When considering to buy a car, there are some key things you should consider to avoid further loss. These are some of the things people easily forget when buying a car on loan;
Choosing the wrong loan term
This is one of the most common mistakes that people tend to make unknowingly when purchasing a vehicle on a loan.
Majority goes for a longer-term with a lower monthly rate in order to pay less on a monthly basis. Mathematically this simply means that motorists ends up paying more in terms of accrued interest.
The best terms to consider instead are the EMI (Equated Monthly Installment)-paying. That is paying the amount in the shortest time that the motorist is comfortable with.
Attaching the vehicle for a loan
There is a big problem when the vehicle is attached to the loan. For instance, if you go to a sales yard in Mombasa or Nairobi and they give you a deposit and then you'll be remitting in monthly instalments.
Neglecting other financing options
The major mistake new car buyers do is simply picking the first car loans they find. But they fail to know that neglecting financing options from other car dealerships could be a detriment to one's finances.
Other than just jumping at the first option one gets, it's essential to do their due diligence by comparing the benefits, features and interest rates of different loans.
Commitment to a loan without a stable income
With the current economic times, Due to high cost of living, when choosing a loan option it's vital to consider the steady flow of income one gets on a monthly basis. This ensures that one would be able to fully pay the amount without fail.
In case of a small businessman without a stable source of income, you should not commit to a loan.
Those seeking to purchase their first vehicle should opt for a low-maintenance car that is serviceable and whose spare parts are easily available.
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