How to Prepare for the Finance Application if You are Shopping for Luxury Cars for Sale
Not many people walk around with R250 000-plus in their bank accounts looking for used luxury cars for sale. The conventional route to buy such luxury cars is to get vehicle finance. Of course, getting pre-approval is even better. But, before you shop for luxury cars for sale on Zambezi Drive or Steve Biko Road – known used-car havens in Pretoria – it will benefit you to follow the tips below to ensure that your vehicle finance application is approved the first time around.
Financers must protect themselves against reckless lending
Regardless of whether you earn a considerable salary every month, if you are overexposed to debt, the vehicle finance company will not approve the loan. The National Credit Act is clear on the issue to protect consumers against reckless lending practices. As such, the financer must be convinced that your income is sufficient for the particular loan repayment and that you don’t already have other debt that demand too much of your income. With this in mind, determine whether you can afford the high-end luxury cars for sale at one of the dealerships on Zambezi Drive first.
Calculate your monthly income and expenses to see how much disposable income you have left after you have paid all your monthly expenses and debt. If you have to cut on food and education to afford the loan, you may be better off with a more affordable, yet still luxurious car offered for sale at our Zambezi Drive dealership. In essence, you want to ensure that you can afford the monthly instalments. Now that you know what you have left, you also know what you can afford.
Do not forget about insurance
If you can only just afford the instalments, you will not be able to take out insurance. And no financer will approve the vehicle finance if the vehicle is uninsured. Keep this in mind because, until you have completely paid off the vehicle, it technically still is the asset of the creditor. As such, the creditor has the right to demand that you insure the vehicle. You must have enough for the instalment plus interest and the monthly insurance premium.
Do you have enough left for service and maintenance?
Like anything else in life, vehicles require maintenance to ensure longevity and reliability. To keep your newly bought luxury vehicle in working order, you must set aside money for maintenance and servicing. Of course, when you buy one of the luxury cars for sale at RFS Auto on Zambezi Drive, you can also benefit from service plans to help make servicing and maintenance more affordable.
How much to allocate to the vehicle instalment
Generally, the finance company will recommend an allocation of about 50 to 75% of the car budget to the instalment with the remainder set aside for fuel, insurance, oil, tyres, servicing, and maintenance. So, if you have R10 000 for buying of the luxury car, R5000 will be used towards the instalment and the other R5,000 for maintenance, insurance, and fuel. When you submit your application for finance to buy the luxury car you saw at our dealership on Zambezi Drive, include the maintenance, insurance, and fuel in your budget. With a budget that allows for such costs, you increase the chances for finance approval considerably.
Do you have the deposit?
If you plan to buy a new or used luxury car, you should save up the deposit. If you cannot afford the deposit, it will also reflect on your ability to afford the monthly car payment. Make sure you have the deposit, as it will add to your credibility. In addition, it will reduce the amount of credit you have to pay and thus help to lower the monthly instalment. The larger the deposit, the lower your monthly instalment amount will be.
Pay off as many of your store accounts as possible and close the accounts before you apply for vehicle finance. This will help to reduce your credit exposure and improve the affordability of the luxury car for sale you saw at our dealership.
Where to get the car of your dreams
If you are shopping for luxury cars for sale on Zambezi Drive, you will appreciate our extensive range. Located in the northern part of Pretoria, we offer clients pre-inspected cars, service plans, and a well-equipped workshop.