For many persons purchasing a motor vehicle for the first time, the process can be daunting. However, Ricardo Williams, head of branches- eastern at JN Bank, says that in reality, it’s not a difficult process at all.
First step- get a licence
“The first thing you want to ensure is what you do prior to buying a vehicle, is to obtain your driver’s licence. Some people may say that goes without saying, but it is really the first step. While you can obtain insurance on a vehicle as soon as your licence is three months old, it is also advisable to wait until your licence is at least one year old, as this could reduce your insurance premium significantly,” Mr Williams explained.
Have a budget
Second, he pointed out that persons should save and have a budget for how much they intend to spend on the vehicle, as most times, there are costs outside of the loan itself.
“Although some financiers may bundle the first insurance, licence and fitness of a new vehicle into one cost, which is then rolled into your loan payments, others do not; and therefore, the buyer may need to come up with a deposit based on: the year of the car, insurance fees, licence and fitness costs,” he explained.
Choose your financing carefully
Mr Williams further stated that depending on the financier and the year of the vehicle, persons may be able to get 100 per cent financing and the option to combine the auto loan and insurance payments into one monthly payment
Documents you’ll need
He pointed out that most financial institutions will ask for more or less the same documents, to start the auto loan process.
“Most financial institutions would require a valid government-issued identification, taxpayer registration number, birth certificate, proof of employment, or an income verification form, last three payslips, proof of address, a pro-forma invoice from the car dealership, proof of deposit where applicable, motor vehicle valuation report and a copy of the certificate of motor vehicle fitness, Williams outlined.
A few costs you should know about
In addition, he said that the buyer would likely need to have a credit check done and this is usually at a cost to him/her.
He mentioned that the credit check is a critical step in the auto loan process, as it determines the individual’s eligibility for the loan and the maximum amount that a customer will receive.
Another cost, which Williams said buyers may have to pay for, is the processing fee, which varies across institutions; as well as a legal fee.
