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, which 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 are willing to wait, here is a little tip: Buy this year’s model when the manufacturer launches next year’s model. At that time, showrooms can run “push-up” 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 “timing strategy”.

And coincidentally, whether it's mid-summer or the end of the year, some banks also launch attractive credit programs for car buyers. For example, the Loan Incentive Program - Changing Life of BAC A BANK, implemented 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 be paid, 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 that you should not spend more than 25% of your household income on cars, including interest payments and monthly operating costs. If you only pay the interest on the car loan, you should only spend a maximum of 15% of your household income if you do not want to share it with other essential living needs.

Based on your actual financial capacity, you can decide on the loan amount (calculated by the value of the car) and the appropriate loan term to adjust the monthly interest payment. 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 supports 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

Choosing a credit granting 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 buying a car because of the convenience and availability of bank staff. However, you need to note that 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 the advertising leaflets flooding the showroom 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 penalty fees if they pay off early.

Meanwhile, other banks - such as BAC A BANK - offer specific terms when customers learn about the possibility of borrowing, 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 personal credit capacity. And most importantly, the loan procedure is extremely simple, disbursement is quick - giving customers the opportunity to own their dream car simpler and easier than ever.