Remember getting presents as a kid? You’re so overwhelmed with excitement and joy to the point that you’re literally jumping up and down on the spot- most likely screaming and probably speaking a language that nobody can understand. Now you’re older. And you’ve just bought a new car. You jump up and down again. People turn and look at you. You don’t care. You experience the same feelings you did as a child, except with a dash of P.P.R. (What’s that?)
When we buy something that’s slightly more expensive and requires us to splash a little more cash we experience something called post purchase regret (P.P.R).
You’ll start to wonder whether you made the right decision and if the money could have been better spent. At some point you’ll inevitably ask yourself: “Could I have gotten a better deal?”
I think the last thing anybody wants to experience when it comes to vehicle finance and buying a new car is regret. With a bit of research and preparation you can ensure that when that dreaded P.P.R pops up, you send it packing.
Here’s how it’s done:
Set yourself a realistic budget
We all like to dream. Yes you may be able to stretch your cash a little bit, but try not to. Spending only according to what you can afford will mean less financial strain. Sit down and work out all your monthly expenses. There are a number of vehicle finance repayment calculators online that will allow you to determine what your monthly repayments will be, based on factors such as purchase price, value of extras, deposit and interest rate. Make use of them to get a basic idea of what you can afford.
Cash is King
Paying cash for a car may not be a realistic option for many people. However, if you do have some cash saved up and you can afford it, paying cash for a car is the best option. If you pay cash you only end up paying the listed price. So if the car costs R150 000 you pay exactly R150 000, whereas if you took out a payment plan you would have to pay interest on top of that amount.
Review your credit history
Taking the time to review your credit history will ensure that you get the best vehicle finance deal. If your history is bad then you may not be able to get a loan. If there are one or two outstanding payments or unresolved issues, sort them out before you apply for your loan. This will paint you in a more positive light with the banks and dealerships because they will notice that you made an effort to resolve these issues. If you have kept a good credit history there is a good chance you’ll get prime or one below prime interest.