Car ownership can be a costly business. Cars have the habit of leaving you with a hefty bill at the most inopportune moments. But with the help of some careful planning, it doesn’t take much to ease the financial stress of maintaining your Vehicle Finances.
- Tire Finance or Vehicle Finances
Tires might not be the first thing you think of when you consider automobile expenses, but a full new set can really hurt your finances. And unlike something small and cosmetic, they’re not something you should consider saving money on or putting off replacing
Thankfully, tire financing plans are available to make the payments less of a burden. ‘Lease to own’ and ‘pay overtime’ options help spread the cost over a fixed term with more manageable periodic payments. Financing plans allow you and your family to budget more effectively and balance the checkbook at the end of the month.
You will be able to choose the period over which the cost will be repaid, from as short as 3 months to a year and sometimes longer with low interest rates. Other payment plans like Sezzle offer 0% interest and still offer payment in four installments over 6 months—there are alternatives for those with lower credit scores too.
- Service Packages
The ongoing cost of running and maintaining a vehicle can be hard to budget for. Service packages—which are akin to extended car warranties—of varying scope can reduce the worry of unpredictable repair costs in the future.
Service plans can be customized to include or exclude certain repairs and their monthly cost will reflect that, but ordinarily they will cover car wearables as standard. Wearables include the battery, belts, headlamps, hoses, brake pads etc. Customers with service plans are more likely to keep on top of the upkeep of their vehicle and hence avoid bigger repair work further down the road.
- Car Financing
Financing doesn’t have to be restricted to the tires or specific maintenance work, you can also finance a purchase of a vehicle in its entirety. There are a few details to be aware of if you’re thinking of financing your next car purchase.
- A Loan
Three factors constitute a loan, the annual interest rate (APR), the amount borrowed and the time over which you will repay the loan (the term). Try and secure a loan that doesn’t include an early repayment penalty should you find yourself in a situation to pay off the loan early.
Since used cars have begun to depreciate, financing the purchase of a secondhand car is often more expensive than a new one but it’s a competitive market, so shop around and find the best deal for you. If you currently have a car loan and are finding repayments a struggle, refinancing allows you to take out a separate loan to cover those repayments which can result in lower monthly outgoings.
- A Lease
Like leasing a property, you won’t own the car at the end of the term, your payments are essentially just for the use of the vehicle for that period. The ‘money factor’ of a lease is a charge that is comparable to the interest you pay on a loan.
While leasing a car is usually cheaper than a loan, you will not be in ownership of the asset at the end of the period which you can then go on to resell. Some lease agreements will offer the purchase of the car at the end of the term.
It’s important to note that when purchasing a car using finance the total you repay will be more than if you were to initially buy it outright but the convenience and practicality of paying monthly is what makes finance options attractive.
Vehicle finances often rank among the top household worries in the country. Many Americans are not aware of some of the payment options included in this article which can go some ways to unburden this stress.