4 smart ways to finance your car upgrade
Time waits for no-one. It’s always out with the old, in with the new. You need to keep up with it and update yourself in all areas. You constantly upgrade your phone, your furniture and your appliances, why should your car be treated differently? It’s probably the second most valuable thing after your house, a very important investment that needs to be carefully considered.
So are you thinking about finally ditching that old rust-bucket of yours and getting yourself a new pair of wheels?If yes, you need to properly finance your new car in a way that you can manage. Here are 4 smart ways to do just that.
- Pay upfront with cash
If you have the means to get a car you can afford without the need forfinancial assistance, it’s the best option. By paying the money for the car upfront, you are saved from the financial burden of debt and the loss of capital via interest from loans. It also secures the right to sell the car independently since the car becomes your own property.
In order to find out if you’re ready to buy the car, you need to assess your finances. Are you capable of affording the new car and have enough to support yourselfin case of emergencies? Are you able to do that with your savings alone? Is there any other pending debt that needs to be paid off beforehand?These are all important questions to ask when investigatingyour own financial security.
Ifyou have enough funds to buy a brand new car, research for the most competitive rates offered by the nearby dealerships.Then compare them with the resale value of the car you want to purchase. Make sure to get the best offer.Also take the long term cost of driving the car into consideration, when you’re trying to determine which car to buy.
- Pay with a loan
If you’re not in the above mentionedfinancial position, you may have to consider getting the funds via a loan agreement.You can get it from the bank, finance provider or a lending peer. Needless to say, it’s not ideal,but it’s the best alternative. Especially in the case when you can cover a major chunk of the cost of the car, but not all of it.
If you can only cover a part of the car’s value yourself, try making that individual deposit as big as possible. This makes the effect of the loan minimal. If you have good credit, then you can enjoy good rates for the loans and easy payment schemes that can stretch for several months.
You can try a ‘Hire Purchase’ as well where you make monthly payments following an initial deposit. This covers almost a tenth of the car’s cost. These payment dates and rates are flexible. However, you don’t officially own the car until you’ve completed the agreement and paidthe last installment.
- Sell your own car
So you’re ready to get onboard with the “out with the old and in with the new” philosophy.Are you prepared to go get that mustang you were drooling at earlier on the freeway? Well, you might just have to do that literally. ‘Out with the old’ obviously means getting rid of your car, by selling it.
Buying a new car demands an influx of capital that can facilitate such a big transaction. Getting loans against your property like your house isn’t a smart way of doing this. The whole point of upgrading your rig is to ‘trade’ it in for a better car. This means that the old ones got to go.
You can sell your used car to independent buyers for competitive rates on online platforms. You can also sell them to dealerships and services that are willing to buy used cars.If the car’s in worse shape, then check with sites that scream we want any car
Make sure to properly understand the actual resale value of your used car.Do that by taking its market value as well as condition and usage into consideration. You can get an estimate of the value of your used car here. Some dealerships even offer to trade in your old car as a way to pay off some portion of the loan or buy agreement.
- Leasing the car
Maybe not the best solution to your motorized cravings, leasing the new car is another option. You canalso get it via a personal contract hire (PCH). This means that you pay fixed monthly fees to the dealership. These cover the expense of the usage of the car, as well as maintenance plus servicing.
Also, there’s a fixed mileage per month that you’re not permitted to cross unless you’re willing to pay extra bucks.This way you get to use your new car without preparing a complete war-chest with your savings.
The catch is that as soon as your agreement is over, the car goes back to the dealer. This is because you never actually get to own the car. If anything, it’s just anover-complicated process of renting one. The advantages, however, include the fact that you don’t need to care about car depreciation. Also, you can make agreements with different dealerships and your payment schemes are rather flexible.
This way, however, is not a suggested method to upgrade your car, since it’s a long term financial burden. This is because of high maintenance costs and chances of exceeding the monthly limit. And, lest you forgot, the car is never yours!
These were the four ways you can smartly transform your current ride into a brand new automobile. Some are more practical than others. It just goes to show that your finances need careful planning and strategizing to enable you to upgrade your car. But if you manage to get it all done, you’ll be cruising on the streets in no time.