3 tough questions that can make your car loan lender sweat!
Buying a car is a euphoric moment for most people. Most people, however, don’t realise that the dealership and the car salesperson are not the only hurdles they will have to overcome. Not everyone has enough in savings to pay for the new car entirely on their own. Thus enter the car loan lenders who will help you finance your new purchase. Everybody knows to beware of loan sharks, but not everyone knows how to stop one preying on you. A lender may exploit your naiveté and try to take advantage of you. There are ways to stop this and turn the shadiest of deals into safe ones. A consumer could ask many questions that show the dealer that they are an experienced hand and will not be fooled.
What is the total figure I am paying?
Most financers use a lot of terms that are native to the finance industry and don’t see much light of day outside it. Consequently, these terms are often misunderstood or not understood at all. As a consumer, you might not know what is actually being said, and many a car loan lender will try and take advantage of this. Whether this is financing or motor trade insurance, anyone dealing with the financial world needs to be told what the bottom line is before making a decision.
Often salespeople will try and avoid this question, instead throwing numbers and calculations at you. The consumer needs to put his or her foot down and know the exact total, right down to the last nickel before signing on the dotted line.
What are the exact terms?
The terms are another area where a car loan lender will try and slip in something to his or her advantage. Many try and pass this off as “standard” terms and conditions, but do not be fooled! Important factors to enquire after are penalties for late or early payments, penalties for anything else, whether there is a fixed or floating interest rate etc. Everyone has the right to know what they getting into before committing to anything, and thus it is important that you demand that your car loan lender explain to you the nitty-gritty’s of your loan before you agree to take one out.
What are the timings of everything?
Timing is very important when taking out a loan. You need to know when the loaned money will be made available to you, as a late payment by the lender can result in penalty by the dealership, or worse, cancelling of your contract. You need to know the exact dates of the instalments that you will be depositing, and if there is last date and whether or not the loan can be extended. Many loans have floating interest rates, meaning the interest changes with changes in pre-set circumstances. You need to know what these circumstances are, and whether or not there is a cap on the increase of the interest rate.