6 Classic Mistakes Borrowers make when Applying for a Car Loan
If you want to save money when you purchase a car, then you have to do more than bargain or negotiate with the car salesman. A mistake on your car loan costs you tens of thousands of rupees and wipes out the savings you obtained, when you haggled over the price of the car with the salesman.
The big mistakes when buying a car are made in the financing options. Making the right decisions when you apply for a car loan could save you huge sums of money in the long run.
#1: Shopping for a car first and then looking for Loans
This is a classic rookie mistake. In the pursuit of the best car, people often do not focus much on cinching the best deals on car loans. Choosing your car first narrows your finance options and you’re likely to end up with less-than-amazing deals.
#2: Failing to opt for the Shorter Tenure
It’s true that when you spread the loan over many years, you’ll pay lower EMIs. On the contrary, you’re likely to end up paying more money as interest. When applying for a car loan, always choose the shortest term available to maximize the benefits of your loan.
Using an online car finance calculator will help you find the best option that works for you.
#3: Choosing the first offer that comes your way
Most people are eager to finalise the deal that they don’t shop around for better options. Do your homework. Ask friends, colleagues or visit banks to get an idea of all that’s available. The internet is your handy tool when it comes to finding the best car loan.
Use comparison sites to help you zero in on the best deal that works for you.
#4: Not Looking beyond the EMI
Just because the EMI is small and fits easily within your budget, it doesn’t mean that the loan is the best. Make sure that you focus on the big picture. Find out the total interest you’ll end up paying, the foreclosure penalty, and other hidden charges before selecting a vehicle loan solely based on the EMI.
#5: Failing to provide a Down Payment
Owning a car without paying anything initially sounds pretty exciting. Doesn’t that sound too good to be true? Yes, of course, it is. This is nothing but just a marketing gimmick to trap in unsuspecting borrowers. The hidden agenda behind this deal is, “Pay less now and More Later.” Zero down payments on auto loans mean that you’ll end up paying more in the form of EMIs and interests later on in the tenure.
#6: Allowing your Emotions overrule your Judgement
You may have an iron-clad control on your upper budget when you go for car shopping. A crafty, salesman can break your resolve by tempting you with exciting offers and super crazy deals. You end up buying a car costlier than you bargained for. Don’t make the mistake of letting your emotions rule your sensible financial judgements, or you’ll end up regretting later.
The Bottom Line
While in hindsight all these common mistakes may sound and feel silly, most people in the excitement of owning a brand new car, lose focus. Don’t fall into the trap and assess your options with a clear mind to land the best car loan. A great way to choose the right car loan is to compare the options available from different bank on the comparison page of www.antworksmoney.com. So go ahead, and start shopping!
