If every Ghanaian earned millions every month, then probably there won’t be a need to buy a car on loan. But, come on, we all know the reality. Cars are often worth hundreds of thousands of Ghana Cedis which our monthly income- or even yearly income- can’t fully purchase. This is why car loans are vital. Car loans also called auto-loan or auto finance are a valid and legal way to borrow money from auto lenders to purchase your car. Simply put, an auto loan is a buy now, pay later scheme to purchase your dream car.
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Getting a suitable car loan is quite easy, provided you know how to go about it. In this article, we will provide you with the best tips on how to buy the car you have always admired with a car loan.
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Get financing quotes
When you want to buy a car on a loan, it’s best to explore many financing options. There are various sources from which you can get a loan in Ghana- you can get it from Banks, your auto dealer, or other private lending services. Search for as many loan-providing services as possible. Use your findings to compare the amount they’re willing to loan, how long the term is, and what interest rate they’re offering to make sure you’re getting the best deal before you sign any contracts.
Go for car loans with shorter loan terms
The loan term is how long it will take you to fully pay back the money you loaned. This can range from months to years. However, it’s advisable to go for loan options with shorter loan terms. This will save you money in the long run as you won’t have to keep paying off the debt over a long period of the term.
Pay attention to the interest rate
One major reason people shy away from obtaining car loans is because of the interest that comes with loans. Simply put, interest refers to the extra money you have to pay for taking out a loan. The interest rate varies amongst auto lenders. It’s advisable you go for an auto loan with a low-interest rate over a short loan term.
Pay as much down payment as possible
Down Payment refers to the initial deposit you pay for the car you want to buy. For most car loan lenders, the initial deposit is between 20-30% of the cost of the price, while the remaining cost is given as a low. However, if you have more to put down as a down payment, then kindly do. The more the down payment you can afford, the lesser the loan you have to pay back.
Pay other fees in cash
Other fees like dealership fees, and documentation fees are needed when you want to buy a car. It is best to pay these other fees in cash rather than include it in your car loan. This will ensure that the loan amount you have to take is significantly reduced.
Ensure you have a stable income source to meet the monthly instalments
Usually, you pay back your car loan in monthly instalments. Hence, it’s necessary you have a stable income source from which the instalment will be deducted. In most cases, auto lenders won’t even approve your loan if your income source can’t meet the required monthly instalments.
Avoid monthly instalments that take a large portion of your income
Remember that asides from paying back the instalment needed for a car loan, you have other bills to pay. Hence, it’s wise to avoid car loans when the required monthly instalment has almost used up all your monthly income.
Avoid shady contracts
Before signing the document to secure your car loan, make sure you have thoroughly gone through the terms and conditions of the loan. If any part is unclear or ambiguous, then do well to ask your auto lenders for clarifications. If you observe anything shady, then walk away from such an auto loan.
Desist from buying add-ons on your car
If it’s just for luxury, then do away with buying add-ons on your car with a car loan. Buying a car in Ghana with auto finance is already a huge purchase, it’s advisable to reduce the cost to the barest minimum by avoiding unnecessary add-ons
Limit late payment
Circumstances may not go as planned, so you are unable to meet up with the required monthly instalments. While this can happen a few times, it’s good to avoid making it the norm as it may attract penalties.
Also Read:
- Car Rental In Ghana: All You Need To Know About Hiring Cars In Ghana
- Lagos To Ghana By Road: Latest Bus Prices And Travel Tips
- How To Calculate Used Car Duties in Ghana: Cost Of Importing Second-Hand Cars To Ghana
- Affordable Mercedes Benz Cars In Ghana: Prices And Reviews In 2021
CONCLUSION
With car loans, you can buy either new or used cars. Endeavour to employ these tips when next you need a car urgently, and a car loan is your best bet to finance it.
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