Saturday, May 28, 2011

Be in the Driving seat with your Vehicle Finance

The humble automobile symbolizes different things to different people. For some, it’s a luxury item, while others depend on it on a daily basis. Whether you use it to commute to work and back, ferry the family around or simply get out and about on your own, owning a car has never been as important in society.

Unfortunately, being a driver comes at a hefty price. Paying for driving lessons is just the start of the financial outlay because after passing your test and getting a license, you have to buy a car, tax it, get it insured and then become a regular visitor to your local gas station. Then you jump on a treadmill of taxing and insuring it every year, as well chopping and changing cars altogether when necessary.

With all these expenses, coupled with the maintenance costs (and many households have more than one car), it’s easy to see how quickly you can find yourself burdened with mounting debt – and all this while you’re also trying to manage your other outgoings.

Therefore, it’s imperative that you realize your own financial limitations well before you purchase a car. Only you know what you can and can’t afford, and that kind of logic should extend well beyond vehicle ownership.

It’s common for people to take out loans to get a car, especially first-time buyers, but just make sure you’re fully aware of the terms and conditions of the repayment scheme and that you always read the small print.

Make sure the loan itself is from a reputable organization and that the APR is in line with what you’d reasonably expect to pay. Of course, look around and negotiate for the best deal possible and when you do receive the loan, break down the repayment scheme so that you know exactly what needs to be paid and when.

Getting into the annual cycle of buying tax and insurance will take some getting used to at first, but after a while you’ll come up with ways of making sure the renewal forms don’t catch you by surprise. If you can afford to pay up front for things like motor insurance, then do so - quite often, you’ll be eligible for a discount if you do. If not, set up a direct debit or a scheme when you pay a certain amount every week or month, and then you can virtually forget all about it.

Filling up your car is another expense to think about. Car sharing to and from work may be a way of addressing this if you live near any work colleagues. Other than that, avoid high acceleration and braking, make sure your tyres are pumped to the correct pressure level and stick to speed limits.

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