Car Loans: Some Tips to Keep in Mind

Choose the time to "close the deal"

Car sales people often "reveal" some golden times to buy a car are near the end of the month or near the end of the year when some companies or showrooms apply better pricing policies or sales staff are willing to offer high discounts to achieve expected sales.

If you’re willing to wait, here’s a little tip: Buy this year’s model when the manufacturer launches next year’s model. At that time, showrooms may run “push sales” programs with certain promotions for older models. Notably, summer is often the time when famous car brands launch new products, so you need to pay attention to the “timing strategy”.

And coincidentally, whether it is mid-summer or the end of the year, some banks also launch attractive credit programs for customers buying cars. For example, the Preferential Loan Program - Changing Life of BAC A BANK deployed from now until December 31, 2019 is currently receiving a lot of attention and interest with 4 interest rate options for customers to choose from to suit their personal financial plans with interest rates ranging from 6.49%/year to 9.79%/year.

Careful calculation before buying a car will help you avoid "burdens" later. Photo: PV

Decide on a budget for your car

First, you need to assess the total cost of owning a car, including the cost of buying the car, taxes and fees to pay, and also estimate regular expenses throughout the life of the car such as fuel costs, insurance, registration, repairs and maintenance.

Financial experts share a very useful rule: no more than 25% of your household income should be spent on cars, including interest payments and monthly operating costs. If you only pay the interest on your car loan, you should only spend a maximum of 15% of your household income if you don't want to share it with other essential living needs.

Based on your actual financial capacity, you can decide on the loan amount (calculated according to the value of the car) and the appropriate loan term to adjust the monthly interest. Most banks apply flexible policies for car loans and provide detailed advice on financial obligations when customers sign the Loan Application, such as BAC A BANK, which allows customers to choose the loan term - up to 10 years and support up to 90% of the actual capital needs - which can be mortgaged with the purchased car.

BAC A BANK's Dream Car car loan package for individual customers is currently attracting the attention of many customers. Photo: PV

Choose a credit bank

Do not assume that the bank that accompanies the showroom is the bank that offers the best incentives: Many customers are invited by sales staff and advised to sign a loan contract right at the time of purchasing a car because of the convenience and availability of bank staff. However, you need to note that in order to easily "appear" at the showroom like that, the bank has to pay a lot of service fees and share commissions with the showroom, so the loan plan offered by that bank is not necessarily optimal.

In addition, customers are quite confused when seeing advertising flyers flooding showrooms with extremely low interest rates (even 0%) but seemingly leaving out information about the application period. As a result, many customers are "surprised" when they have to pay a large amount of money after the preferential period along with very high penalties if they pay off early.

Meanwhile, other banks - such as BAC A BANK - offer specific terms when customers learn about their loan possibilities, the interest rate options corresponding to the preferential period are very clear and specific. The interest rate adjustment range applied after this period is also advised in detail depending on the individual's credit capacity. And most importantly, the loan procedure is extremely simple, with quick disbursement - giving customers the opportunity to own their dream car more simply and easily than ever.