One of the first questions that you should ask yourself is, “Do I really need a vehi-cle right now?”. In most cas-es, a vehicle is needed to travel to work. However, if your work is close to home, then it may be best to save/invest for a period instead of financing via a loan. I normally recommend going for a “starter vehicle”; one that is cost-effective and not considered your luxury dream car.
It is critical to know that this is often good for inex-perienced drivers as you may incur more “fender benders” and minor damag-es during the formative years of driving. A starter vehicle will mitigate the ex-penses and emotional dis-tress of having damages to your luxury dream car.
Things to consider when purchasing a vehicle :
- Insurance
- Fitness
- Registration
- Petrol
- Maintenance
If your work is far from home and you are spend-ing on average $1500/day for 6 days this would amount to $36,000/month. Applying the 50-30-20 rule or its variations, then this may be enough to loan finance a vehicle. To minimize cost, below are some of the things that you need to investigate, understand or ask for:
- Loan interest rate (cheapest interest rates)
- Type of vehicle (resale value, parts availability, service requirement, se-curity)
- Loan financing condi-tions (paid insurance etc., % financing, loan term,)
Contributed by: MIT. Donrossi Simpson