Whether you are a first time car buyer, or someone who hasn’t purchased a car in a while, it is important to have a firm grasp of how financing a car works, and the considerations that one should have when making this important commitment. Remember, while shopping for a car is an exciting process, financing one is a contractual obligation that you cannot easily exit without incurring costs, so being informed and doing your research upfront will ensure you make the right decision about your new ride.
Understanding the Basics of Car Financing in South Africa:
When you finance a car, you're essentially taking out a loan to purchase the vehicle and agreeing to pay back the loan amount, plus interest, over a specified period. The terms of the loan, including the interest rate and duration, can vary based on your credit score, the amount of your deposit, and other factors. The car belongs to the financial institution until the final repayment on the loan is made, at which time you become the official owner. This is why it is important to also have good insurance cover on a financed car, as an accident could result in you becoming liable for the outstanding amount if the insurance is not sufficient or suitably structured.
Evaluating Your Budget and affordability:
Before diving into the world of car financing, it's essential to evaluate your budget. Determine how much you can afford for a deposit and monthly instalments. Taking into account your monthly income, and all fixed expenses you have on a regular basis will allow you to accurately assess what you can afford on a car loan. You will also have unforeseen expenses that come up, so its recommended not to overextend yourself on the monthly repayment. Remember, the larger the deposit, the smaller the loan (capital) amount, which affords you a lower monthly payment and less interest that will need to be paid over the lifetime of the loan.
Exploring Financing Options:
South Africa offers various financing options, from traditional banks to credit unions and even finance products offered through the dealership you buy your car from. To cater for the diverse population, Mazda South Africa for instance has introduced tailored finance plans to that South African car buyers can consider, whether it’s a 0% deposit option for easy entry into the car market, or a more flexible solution affording more regular car upgrades.
Fixed or variable interest rate:
Mazda being a renowned Japanese car manufacturer, stands out in the South African market with unique finance plans on its cars, which allow consumers to take the risk on variable interest rates (as these are increased or decreased by the SARB) or to fix the rate they pay, so this remains constant for the lifetime of the loan. The 2 unique finance options Mazda products, that give you this choice are as follows:
Mazda Secured: This plan is for those who have a clear vision of what they want. Mazda Secured provides a straightforward and accommodating way to finance your vehicle. It offers flexibility in terms of deposits, agreed terms, balloon payments, and even a deal structure. With Mazda Secured, you're guaranteed to find your ideal solution.
Mazda Assured: The future is unpredictable, and Mazda understands this. The Mazda Assured plan offers a 3-year contract that provides the flexibility of choice. At the end of the term, you can decide to return, renew, or retain your Mazda, giving you peace of mind and control over your investment and ensures you can drive the latest Mazda model to keep up with the times and your image.
The Importance of Research:
While Mazda offers some of the best finance plans in the market, it's always important to research and compare. Look into the terms, interest rates, and other benefits offered by different financiers. Remember, the South African car market is competitive, and as a consumer, you have the power to negotiate deal terms and choose the deal that suits you best.
For specific details and terms, it's always recommended to consult directly with Mazda or a financial advisor.
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