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Tips for Financing your next luxury car

Tips for Financing your next luxury car

We all know cars, especially luxury cars, can come with quite a hefty price tag. However, there are several ways you can finance your new car to ensure it sticks within your budget. Financing luxury cars becomes more manageable if you follow our five tips below.

 

Top 5 Tips to Know

Top 5 Tips to Know

 

We looked at five of the most important things you need to do and consider before buying your new car. It’s important to stick within your budget, and these financing tips will guide you to planning your purchase smarter.

 

Make a Down Payment of 15-20% 

Make a Down Payment of 15-20%

 

While it might seem overwhelming to pay 15% to 20% of your car’s price upfront, it’s highly beneficial in the long term. Not only does it lower your possible interest rate, but it also decreases your loan term. You make it easier on yourself by paying this amount upfront instead of going into it on a zero-down payment finance plan.

 

Compare Your Interest Rates

Compare Your Interest Rates

 

Interest rates aren’t set and can change depending on the dealership or lender. Compare the different interest rates given by different parties to find the one that’s the lowest. Don’t get persuaded by low EMIs, as often that leads to a higher interest rate and means you pay that much more in the long term.

 

Get Pre-Approved For a Car Loan

Get Pre-Approved For a Car Loan

 

If you’re pre-approved for a car loan, it gives you an idea of what price range you can afford. It also gives you a better standing with the car dealership, as you come into the dealership with a precise figure in mind. It allows you to negotiate better with the dealer and better understand your possible interest rates, etc.

 

Separate Add-ons from Base Car Price

 

There are many add-ons you can purchase with a car. These add-ons include extended warranties, roadside assist packages, and more. However, while you can add these extras, don’t include them in your vehicle’s financing plan. Rather pay upfront or with cash for these benefits, as you don’t want to increase your loan amount unnecessarily.

 

Don’t Miss Your EMIs

Don’t Miss Your EMIs

 

Your equated monthly instalment (EMI) is the loan amount you need to pay each month. It’s crucial that you don’t miss one of these payments, as you can be penalised with severe fees and higher interest rates. Stick to your EMIs at all times. It’s also recommended that you make pre or part-payments if you have a bit of extra cash for one month. This allows your interest rate to be lower and your loan paid off faster.

 

Finance Your Car Smart

Finance Your Car Smart

 

Financing luxury cars doesn't have to be impossible. There are several tips you can follow to ensure your financing has the lowest possible interest rates and loan terms. It’s often better to have higher EMIs with lower interest rates and loan terms, but the most important thing is to consider your budget. Keep the five tips above in mind when looking at your next luxury car to have a smoother buyer experience.

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