Bring your budget calculations into the scene of your vehicle finance application.

Not everyone is lucky enough to score an approved car loan from their very first vehicle finance application for a new or second hand car.

Before crashing down in the dumps, consider what the reason could be exactly. Remember, every car finance option can be tailored to your particular circumstance. With South Africa’s downgrade to Junk Status, the economic market took a hit with unwavering fluctuations in the country’s costs of living – hence, the skyrocketing costs of owning a set of wheels and hassle in passing the muster of an application for a car loan to buy a new car with cash in hands.

Why? Consider this: Every car in the Mother City, Jozi or PE has important components; hence, if the Rand goes down, vehicle manufacturers pay more and the public pays the difference.

Applying for a car installment through a vehicle finance application has therefore become more tricky than ever. So, consider these 3 simple ways to help ensure you get your car loan approved.

#1 How much can you afford to spend?

• Take your monthly income after tax and subtract all expenses that add-up to your monthly cost of living. What’s left-over is your ‘disposable income’ and essentially, how much you can afford to repay for a new set of wheels.
• Use your monthly ‘take-home pay’ to buy things that you need and not want.
• Consider the running costs of the car – maintenance, servicing, possible repairs, fuel – and make sure it fits comfortably in your disposable income.

#2 Settle as many of your debts as possible.

• Vehicle financiers record-check all credit profiles.
• By settling your debt, financiers will be able to examine how your manage the monthly payments on your credit cards, home loan, overdraft or clothing accounts – demonstrating that you are reliable.
• You can either close your accounts, or pay it down to reduce the limit in order to prevent you from spending unnecessary cash and make the financier happy.

#3 Save up for a deposit.

• Putting down a deposit can come across as being financially responsible, to the financier.
• A deposit reduces the asking credit amount and in turn, the monthly vehicle finance repayment amount.
• Banks will be pleased to know that the total car loan amount is less than the value of the car.

Most people would say that trading-in your second hand car is the best solution, but quite frankly, this view is debatable. If you owe more than what your current second hand car is worth, you’d have to continue making the vehicle finance repayments on your car loan, until you break-even – the value of your used car is worth more than what you owe.

Calculate your car loan installment with CarZar’s Vehicle Finance Repayment Calculator; or sell your car to us on www.carzar.co.za and receive instant cash in hands to settle those big-ticket debts or put down a deposit on your new car.