Find My Ride - Tips for buyers #2

Finance. Should be a simple task, you apply, you get approved or declined. Well, I'm here to tell you it's not that simple. The banks look at a few things when an applicant comes across them:

1. Credit History
2. Affordability
3. Amount of applications applicant has sent in.
4. Work history

So what is Credit History? Well, you create a history every time you get credit, cellphone contract, clothing account, car finance, credit cards, home loans,personal loans etc. If you are a diligent payer and do not miss a single payment, your credit history will be spotless, you have nothing to worry about and your negotiations to lower your interest rate are strengthened. If you have missed a payment or two and have caught up and been a diligent payer thereafter, your credit scoring will be lower, however, you will still be likely to get credit. If you have lost your job, missed many payments and are playing catch up with your payments, your credit score will not allow you to get finance.
Everything you get on credit, every payment you make is recorded and when your details are searched when looking for finance your payment history will come up, either giving you a great chance, a good chance or no chance at getting finance.  At this time,I would also like to point out that if an expat comes looking for finance, they would also more than likely be declined as they would have no credit history at all. So if you are looking to finance a car/house, start with building your credit history with accounts. Now, I think it is only fair for me to point out that, if you do not get finance a at bank, you will not get finance anywhere else. I have had many people call into my business thinking that I can work miracles, unfortunately I can't, one would need to clear their name first and build up their score again.

Affordability, well, either you can afford it or you can't. I have had many applications where a client believes if they earn R7000, they can afford to pay R3000 a month for a car. Unfortunately, the banks do not work like that, they take into account insurance that still need to go off, and any other unforseeable extras one might find themselves needing through the month. So,perhaps look at a max of 25% of your salary after monthly payments going towards your monthly instalments for a car. Don't forget though, if you are already paying a monthly instalment on car that you are planning to trade in, to take that amount off your expenses and add it to your surplus.

Applications, well, many people do not realize that if you apply for a car at every dealership your credit score decreases. Banks look at this and then will decline you eventually. When buying a car, make sure you know what you are looking for, and once you have viewed the car and any others that you are interested in, make a decision and apply.

Work history, if you have worked at 3 different places, for example, in a year, the banks will not really consider your application. They want people who are grounded and stable with their income.

Well, I hope this has helped to keep you informed, once again, Find My Ride can help you with all of this just send your details to us and we'll do the rest. www.findmyride.co.za.

The Find My Ride Team