Guest post by Alpha Car Finance. They strive to bring affordable and quality cars to the Australian people, even to the ones with bad credit.
So, you are thinking about getting a new car, but you are scared that you might get caught in deep debt and a bad credit car loan. It is common to feel overwhelmed and worried, besides, you are taking on a huge responsibility. Buying a car can be really expensive, so you must do everything in your power to make sure that your money is being used effectively.
Today, we are going to talk about how to get out of debt and how to avoid it before deciding on getting a new car. Whether you are looking into buying a brand new one, getting a car lease or car finance, it is important to take note of these tips.
Know your New Car Budget
The most important thing before deciding on getting a new car is setting a budget. Lay a specific amount down and follow it. This can include your savings, your monthly income, and other budget that you have allotted for your new car. Not setting a budget can easily get you caught in a huge debt, so make sure to put your budget first before your preference in a certain car.
Increase your Deposit
Put more into your deposit to ensure smooth sailing for the rest of your term. Make sure to put at least 20 percent of your money to your deposit. This way, you’d get to pay smaller amounts monthly. Pay with cash and not your card, as paying with cash can only get you in trouble.
Do not just go into a car lot and buy the first thing that you see. As we have mentioned earlier, buying a new car is a big responsibility. Think about it a couple of times, and ask yourself questions such as whether you really need a new car, how much your budget is, and what type of car you need. Being impulsive is the number one culprit to being caught deep in debt, so you definitely want to you have thought things through. Plan everything out first, and make sure to stick to that plan.
Do your Research
The internet is there for a reason, and making the most out of it can do you a lot of good. Research about what car would best fit your budget, and if possible, do a test-drive on it. You have a lot of options when it comes to car choices, so maximise your time and test drive a few so you wouldn’t regret buying it in the end.
Pay your Current Debts Off
Make it a point to pay all of your debts even before acquiring a new one. Debts can easily pile up and if you do not take care of it, it can easily balloon to a huge amount. If you have extra money and you think you can pay most or all of your debts off, then go ahead and do that. You will be thankful that you did, as you only need to worry about your auto loan moving forward. For more information, read our article on figuring out who to pay first when you owe everyone.
Read the Fine Print
Before committing with a certain company on a new car loan, make sure that you read the fine print first. Large financing fees and additional fees can easily put you in trouble. You can easily avoid these things by reading the contract first, and if you do not agree, then you can always look for a better deal. Additional fees such as insurance and the likes can be expensive, and can eventually be the cause of huge debts.
For professional help on reducing your debt, browse our debt solutions or speak with one of our experts now. Simply chat with us live or call us on 1300 368 322. We’re here to help!