Maybe you have secured your first job, and now you are looking for better ways to commute to and from work, as well as your other commitments. Or maybe you have finally saved up for your first car. Whatever the reason, if you are reading this, it’s probably because the title relates to you. In this article, we will give you tips on how to secure your first set of wheels, what to expect as a first-time car buyer and owner, and how you can get your first vehicle finance approved.
First, Budget Matters
Affordability is important when buying a car. Not only the affordability of the car itself but the maintenance too. The best way to gauge if you will be able to afford to have a car is to create a budget for it to estimate how much it will roughly cost you a month. Other considerations to make include:
- Factor in fuel and other liquids: Your car does not only run on petrol or diesel, so you will need to calculate other costs such as oils and other fluids that will keep your car running.
- Wash your car: Think about cutting costs and saving money by washing your car instead of taking it to the car wash.
- Add in your monthly instalments: You want to know for sure how much you will need to pay for your car instalments so that you budget wisely, so familiarise yourself with that before even making the purchase.
- Include your insurance costs: You need to consider getting car insurance so that you do not have to incur large costs should anything happen to your car.
- Start saving for service: To avoid having to fork out large sums of money for car service, consider saving up for it by breaking down the cost into the number of months before it’s time to service it, then use those months to save bit by bit. Alternatively, find what it costs to buy a service plan. If you can’t afford to pay a lump sum upfront, you add it to your car loan.
As a car owner, it is important that you have some money saved up for a ‘rainy day’, especially if you don’t have insurance.
Financing Your ‘Baby’
If you are buying a car cash, then all you have to worry about is the cost of maintaining that car once you drive off the dealership. However, if you have not saved enough funds to buy your wheels cash, then you may be thinking about the idea of financing it through a financial services provider. They will help you finance your car whether you are buying from a dealership or a private owner. As a newly employed individual or a young professional looking to get their first set of wheels, you can take advantage of graduate finance, which is much like vehicle finance, without the stress of having to have a credit history of some sort. With graduate finance, you can finance your car without having to be in more debt. To qualify for graduate finance, you need to be under 31 years of age and:
- have a degree/higher diploma obtained in the last 3 years;
- earn at least R10 000 per month, and provide proof of your employment; and
- have the affordability to enter into a finance agreement.
How To Get Approved
You may feel you qualify for graduate finance based on the above, but you need to make sure you get approved. You will be vetted by the financial services provider you are looking at to help with your car, and if you qualify based on their standards, you will be approved. Most financial services providers tell you immediately if you qualify, and if you do, you will have received a call to finalise everything. Make sure when you apply, you submit the following documents in order to make sure your application gets viewed:
- Proof of address not older than 3 months
- A copy of your ID
- A copy of your driver’s licence
- If you have a job offer but haven’t started working yet; a signed employment contract
- If you started working less than 3 months ago; a signed employment contract and a recent payslip
- If you’ve been working for more than 3 months; a recent payslip and 3-month’s bank statements.
Buying your first car should be the most exciting part of your life, a milestone. And financial services providers are dedicated to giving you access to drive those cars without having to go to loan sharks that may cheat you. Ensure that you collect as much research as possible in order to fully understand what is needed from you, and do not be afraid to ask questions about your financing options and more. After all, money is an important conversation. See you on the open road.