Now that you’ve chosen your car and your vehicle finance loan has been approved, it's time to sign on the dotted line. And as exciting as the moment is, it’s one not to be taken lightly. Purchasing a vehicle and receiving vehicle finance from a financial institution is a contractual agreement that needs to be thoroughly understood. This is the part of the purchasing process where being all necessary information has been explained to you and all vital questions have been asked.
Get Clear On Vehicle Purchase Paperwork
Are you clear on the purchase price, the monthly instalment, vehicle extras, and all other contractual obligations that have been discussed? Once, these have been done, the signing of the paperwork begins. The contractual agreement will be explained throughout the signage. Every item that relates to the repayment of the loan will be explained and an opportunity for clarification given. However, at this point, there is little chance that the agreement will change as this was partially explained and discussed during the application process. Take your time, ask and understand as you don’t want to leave the dealership unsure.
Let’s Talk Interest
During the signing process, you will be asked which interest rate option suits you best, fixed or linked interest rate. It is important to familiarize yourself with what each means and how it will affect your affordability. A fixed interest rate is a loan where the interest does not fluctuate during the agreed period. A linked interest rate means that your interest rate is linked to the prime lending rate of South Africa. When it increases, so will your instalment and when it decreases, the less you pay. Bear in mind that your repayment period which is between 12 to 72 months will affect your interest rate. The longer your repayment period is, the more interest you will likely pay. Your interest rate will also be determined by the financial option you have chosen, whether it is a deposit, trade-in or balloon payment.
In the contract, it will clearly state what it is that you are agreeing to. This is where you will have the opportunity to have your dream car will all bells and whistles at an additional fee. These are called value-added extras. They include vehicle enhancement products ranging from insurance products to interior and exterior customization and service plans. Included in this is the purchasing price, licensing, and administration fee.
There are others to protect your vehicle like Auto Pedigree’s Component Cover which assists you financially in the event of a mechanical or electrical breakdown.
Many vehicle dealerships during the application process advise customers to look for vehicle insurance on their behalf. They negotiate with major insurers to get them the best comprehensive vehicle insurance cover at favourable premiums. More importantly, it is to ensure that they drive off with their vehicle. In the event, that a customer opts to find their vehicle insurance, they will need to prove to the dealership that vehicle insurance and tracker is in place. If they are unable to, they will not be able to drive the vehicle out of the dealership.
Auto Pedigree consultants are available to assist you with any questions you may have.