Getting a Car Loan as a First-Time Buyer
As a first-time buyer, taking a car loan is challenging, because you don’t know if you are making the right or wrong decision. Due to the lack of experience, you find the whole process stressful, as there are several factors you need to consider. To help you out, here is a small guide on getting a car loan as a first-time buyer.
What is the importance of down payment?
To take a car loan from a dealership or a lender, you need to give them a down payment. The amount you have to pay ranges between 10% - 20% of the cost of the vehicle as advance. A down payment is important as it impacts how much you pay every month. For instance, if you make a large down payment, you have to pay lesser money every month.
What is the meaning of the transfer of ownership?
As you are taking a car loan from a lender or dealership, they have the title to your vehicle. Once you finish paying the entire loan amount, the dealership or lender will transfer the ownership of the vehicle to you.
Tips for taking a car loan
Determine how much you can afford
The first thing you need to do as a first-time buyer is to find out how much you can afford to pay every month. Try to be as realistic as possible, as this decision will prevent the car loan from being a strain on your finances. Take all the costs such as accommodation, food, and maintenance into consideration. The monthly payments for your car loan shouldn’t exceed 15% - 20% of your salary.
Create a list of all the vehicles
The next step is to make a list of all the vehicles which you can afford. For instance, find out which vehicles meet your requirements, such as performance, mileage, and features. Compare all the vehicles to see which one gives you good value for money.
By following this simple guide, you won't find the whole process overwhelming. If you want the process of getting a car loan to be simple, get in touch with TakeTheDrive. It will only take you two minutes to complete the online form!