If you’re wary about getting a raw deal when buying your next car, you can’t go wrong with affordable Isuzu finance packages. The leading manufacturer of utility vehicles is keen to help you avoid some costly pitfalls on your next purchase. Getting affordable financing ensures that you have a great motoring experience from the get-go. Here are some expensive mistakes that you need to sidestep when buying a car.
Focusing on the Monthly Payment
Few buyers are in a position to request a one-off payment. Therefore, the conversation revolves around how much you can afford to pay each month. While a payment plan is a convenient way to help you make a large purchase, it’s a slippery slope. You need to tread carefully to avoid some of the costly pitfalls that dodge the process.
Fixating on the monthly payment can make you miss the bigger picture: the price tag. You are likely to buy a car that’s above your affordability, putting a strain on your finances in the long run. In such instances, you’re likely to stretch the repayment period to fit your monthly budget, which amounts to a cardinal mistake. Ideally, you shouldn’t settle for a car plan that extends to five years.
Raising a Small Down Payment
It sure sounds like a good idea that you can walk into a dealership and drive out in an expensive new car without putting anything down. Well, not so fast. Savvy car buyers know that modern vehicles have a rapid rate of depreciation. The rate can be as high as 20 per cent depending on various factors, including demand and supply.
Hence, you can end up owing more than the value of the car. When you put nothing down, all other related costs, such as the taxes and fees, get rolled into the loan. Thus, you’ll be driving home in a shiny new car that is worth far less than what you owe. Things turn for the worse if you plan on selling the car before the loan is fully paid off.
For instance, you find that you owe $12,000 on a vehicle that is worth $8,000, meaning your $2,000 short. Now, you have to come up with the difference or finance it into the new loan. It might feel good to get a new car without coughing up a deposit, but it’ll cost you a pretty dime.
Overlooking Other Costs
Before you’re roped into a car plan with low monthly payments spread over many years, remember that final buying price is the most important figure. The cost of insurance premiums increases with the value of a car. An expensive vehicle will set you back thousands of dollars annually. If you opted for an extended repayment plan because you’re short on cash, you can expect more trouble. Naturally, high-end cars tend to be pricier to run and maintain, further digging a hole in your wallet.
Given that a car is likely your second most expensive purchase after the mortgage, you need to tread carefully. You need to understand the fine points, especially as far as financing goes. Otherwise, you might find yourself in a sticky situation wherein you owe more than the value of the car.