UNDERSTANDING HOW TO PURCHASE YOUR VEHICLE

UNDERSTANDING HOW TO PURCHASE YOUR VEHICLE

To the average prospective vehicle owner, it takes a considerable amount of planning in deciding to purchase a vehicle. After settling on a specific brand or make, preferred technical features, prospective vehicle owners must set a budget and make a decision on how much you can spend and how you will finance your new car. Several vehicle financing options are available, the preference of one to another depend on a lots of factors, however it relatively flexible to finance a vehicle in Europe and the Americas than in Africa.

The following are ways of purchasing that vehicle of your choice.

Outright payment (cash)

The first and most common way of purchasing that vehicle is to pay cash outright. Whether you visit an auto dealership or used car dealer, cash purchase comes with a percentage discount. It ranges from 3 – 7 % depending on the dealership. Auto dealerships sometimes reduce their prices further when the year is coming to an end so that they can clear their old stuck. You can get a great deal when you shop at that time.

Buying through the banks (auto loans)

A prospective auto buyer can also purchase a vehicle through the banks. In other jurisdictions, there are firms whose core business is to provide auto loans. The banks or the auto loans firm will buy the vehicle from the dealership and give it to their client. They will then spread the payment period for their client. Payment periods ranges from 1 – 5 years depending on the firm and the client’s financial ability to pay in time. The client will be charged the cost of the vehicle plus interest. In this case, you will report any issue on the vehicle to the financing firm aside periodic maintenance. The vehicle will be in the name of the financing firm until you are done with the total payment. You need to consider the cost of financing and the requirements of the financing firm, whether it will be in your favour or not if you are going for this option.

Trade-Ins

Trade-Ins are more popular in Americas and Europe than in Ghana. With this option, you send your old vehicle to the auto dealership you bought it from in exchange for a new one with a top up fee. 

• You need to meet the following requirements
•  You should have bought the vehicle from that dealership
• Your vehicle should have followed the required maintenance schedule.
•  Your vehicle will be valued against depreciation. After the valuation, the present cost of your vehicle will serve as the initial deposit for the new vehicle you want. After that you will pay the difference which is the top up fee.

Buying on credit from the auto dealership

A customer can buy the vehicle on credit directly from the auto dealership. It is similar to buying it through the banks or auto loans firm. In this instance, you report to the dealership directly when you are faced with any problem concerning the vehicle except periodic maintenance. Credit requirements vary from one dealership to another. As a buyer, you should shop around to find out which terms and conditions will be favourable for you. Buying a vehicle is a huge investment therefore you always need to make the right choice.

Below are some factors you need to consider when securing an auto loan or buying a vehicle on credit from an auto dealership.

•   Annual interest rate
•   Initial deposit
•  Amount to be financed
• Cost of insurance
•  Cost of vehicle maintenance
•   Monthly installments
•  Period of payment. for longer years, you will pay less monthly installments but higher financing fee at the end of the payment period and vice versa.

Monthly breakdown of your income

With this you can review expenditure of your recurrent expenses and shed a few percentages off to generate income which will then be used to finance your vehicle purchase.

The following is an example of how you can plan your budget to finance your auto loans or credit purchase for your vehicle.

Item	Current amount	Reviewed amount
savings	XXX
Utility	XXX
Transportation	XXX
Food	XXX
Medical bills	XXX
Housekeeping	XXX
Social commitments	XXX
food	XXX
Internet	XXX
Other fees	XXX
Miscellaneous	XXX
Rent charges / mortgage	XXX
Insurance	XXX

The first column the list of your expenses. The second column give you an idea of your current rate, the total gives you a fair idea of the amount you will have to take out of your monthly income flow to finance your vehicle purchase. The third column represent adjustments you can make on various items listed above so that you will be able to see your payment period through.

Buying a new car is big step, but it does not have to be a daunting one. With adequate knowledge into the various purchase options available to you, one is sure to make a decision that gives optimum benefit. Good luck with your purchase.

About the Author

Edmond Nana Cabir Flynt is a vehicle sales advisor and consultant based in Takoradi - Ghana. He is also a volunteer, an entrepreneur, and an auto show radio presenter.

For further enquiry, consultation, advertisement, product promotion (vehicle related), vehicle and accessory sale, contact him on the following numbers +233(0)209461930 /+233(0)548383591 and email nanaflynt@gmail.com

Editor

Matthew Odoom Ntsiful - He has moonlighted as an editor since his undergraduate days at University of Ghana, where he edited papers for fellow students. He recently made a career decision to become a full time freelance editor and writer. He doubles as a Sales and Marketing consultant with concentration on Digital Marketing.