One of the most common mistakes that first time car buyers make is forgetting to include car financing in their plan. It’s important to remember that buying a car is not an investment. Its value depreciates greatly as you use it, so getting a car loan should be done carefully. The interest rates can be extremely high, while the value of your car diminishes over time. Fortunately, there are several car financing methods you can use especially if you want an Octavia or other models from the Skoda brand.
If you’re interested in purchasing a car or a sport wagon, whether it’s brand new or used, take note of the following car financing tips:
Ask for quotes from reputed car dealers
Car dealers offer dealership loans to customers who are looking to buy a car from them. Unlike going to the bank by yourself for an auto loan, the dealers will help you apply and get approved for a loan faster. They are usually accredited by several lending companies, so it’s easy to get car financing from them without a lot of paperwork involved.
Some dealers will charge higher interest, so it’s better to scout for several dealers to have lots of options. If you have a good credit score, some car dealers might even give you a discount, whether you are buying an Octavia or another model.
Pay for the loan in the shortest possible term
You will decide how long you’ll be paying for the car, and your goal should be to keep the payment term as short as possible. This means that you’ll have a lower interest rate but higher monthly payments.
Don’t get swayed by a car salesperson’s sales talk about how low the monthly payments will be if you choose a longer term. When you compute the overall cost of the car, you’ll find that it’s significantly higher than paying for it short-term.
Thus, if you’re planning to get an Octavia car, it’s better to pay for it in not more than 3 years.
Put in a big amount of down payment
Another tip if you want to pay off your Skoda Kodiaq car loan as quickly as possible is to pay a good amount for the down payment. Putting in 20% or more is already enough to slash the cost of your monthly payment significantly.
Sure, it’s tempting to pay for a lower down payment especially if the car dealer doesn’t require a specific percentage for it. However, if you don’t want to pay higher interest rates down the road, a high down payment will help you save money.
Exclude taxes and other fees in the loan
Other additional fees, such as taxes, documentation, and registration fees are better paid in cash rather than adding it to your loan. Doing so will add up to the monthly payment you’ll be paying for, increasing the amount of your loan. So, pay for your down payment and additional fees upfront, then drive your Skoda Monte Carlo knowing that you financed your car smartly.
Looking for a reliable Skoda dealer? Brisbane City Skoda sells various Skoda car models that are both brand new and second-hand. They also offer different financing options and warranties based on your needs.