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Financial tips on buying a new car
Stanbic IBTC team
Not applicable

Whether you are planning to buy your first car or your current car is already a few years old and you are thinking about a new one, you should know that buying a car can be very overwhelming.

Let’s face it, we all just want to get it done rather than spend time weighing all the options. To guide you through the process of buying a car, here are a few tips:

Identify your kind of car
Be it a fairly used (tokunbo) or a brand new car, you will need to know what kind of car you want and if you can afford it. The banks are always willing to finance once you meet their requirements and know the kind of car you want to buy.

Determine your budget
Work out the finances before you go shopping. Find out about the price of the car and the process of getting it once you pay. A bank will usually help fund up to 90 per cent of the value of the car, this means you will have to come up with the balance of 10 per cent. And most times, your repayment will not exceed 33.3% of your monthly net income. Find about our car loan options here

Research trade-in and buyback options for you current car (if you do have one), this will help you improve your cash flow towards the purchase of your new car.

Negotiate a car deal and close the deal
Go to a dealer knowing you should negotiate any terms offered to you. Don’t limit yourself to one dealer, if one isn’t working for you, go to another. If the second dealer beats the original offer, keep the competition going and go for the best offer you can get. We have seen that dealers are able to revise prices downward for as much as 3-5% of the asking price of any car.

Insure your car
You should organize insurance before you leave the dealership; the last thing you want is a crashed new car with no coverage. You will need to provide funds for the insurance premium, so make sure this is accounted for in your budget. This varies from company to company depending on the type of insurance package you chose.

Think about maintenance and after sales
A car is only as good as the after-sales service available. Maintenance is important to getting the most value out of your car. You should only buy a car you can afford to maintain and with accessible spare parts. Some dealers will provide maintenance and spare parts for your car.