Whether you are student or have just graduated and are entering the working environment, purchasing your first car shouldn’t be daunting. Here are a few tips and information to put your mind at ease, as you consider purchasing your first car
Have you ever browsed through potential jobs and looked through the requirements, and saw the infamous, “Must have own car”? Buying and owning car is a big responsibility but the process of finding your first car need not be stressful. Here are a few tips, so you know what lies in store and to help smooth the process.
Apply for a professional bank account
Your student bank account can last for a few months after you graduate, then you will need to change it. When you are a student or are new graduate, you are seen as a high risk, but having a professional account can help you to get better deals on loans (for example, you can ask for the prime rate less 1%).
Budget: New or used?
Be honest with yourself as to how much of your salary you are willing to part with for your car. Be conservative with the amount as a car comes with extra costs such as fuel, a maintenance plan, insurance and random tyre changes.
Consider buying a demo car. This is the car the dealership uses for promotions and test drives. It will be second hand and have a few kilometres on the odometer, but it has never really left the dealership. A demo car can be substantially cheaper than a brand new car.
Going to dealerships
Once you know your budget, and are ready to visit a dealership, take someone with you. Make sure this person is knowledgeable about cars but also knows how much you are willing to spend.
Do not rely solely on salespeople as they may be tempted to sell you any and everything in the pursuit of a higher commission. Some salespeople will guide you well but not all, so bear this in mind.
When viewing your first car at the dealership, be sure to touch it, open the doors, sit inside, look at and then test drive to feel the car.
After deciding on a specific car, the next step is to finance it. If you are buying from a dealership, the salesperson will lead you the finance department, which will ask you for your name, ID number and other information.
They will then send this information on your behalf to banks, and ask for them to finance your purchase. Banks can be quick to respond. They will be able to let you know whether or not they will help you to finance your purchase, what the monthly instalments will be, as well as the interest rate they will offer.
However, do not sign yet. Rather take their card and GO HOME and think about it, as your first car is big purchase.
Buying your first car
After you are confident of your decision to buy your first car, you will need the following documents: ID, signed employment contract, three months of bank statements (which can be from your student account), as well as your payslip, or you can request dummy payslip from your employer.
The documents will then be processed on your behalf. The dealership will help find insurance for you, as most dealerships won’t allow the car to leave their premises without insurance. After this is completed, you can then collect and enjoy your new set of wheels.
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