It’s an amazing feeling when you start earning and supporting yourself. One of the things that you want to buy immediately after you become independent is a car.

It’s natural. When you start earning enough you want to have a good car so that you can travel to places on your own and in some cases, impress others.

Owning a car is not easy. You have maintenance costs and then there is the fuel consumption and many other expenses.

In order to avoid problems later, you need to plan ahead. This is where car financing plans come in. These plans by different banks enable individuals to buy their desired cars now and pay the bank over a period of time.

We agree that these plans are indeed very helpful and friendly but you need to make sure that you are getting the best out of these plans. You need to be watchful of the interest rates and other hidden charges.

There are a few things that we need to keep in mind when looking up car financing plans. It’s like when you go to buy clothes you need to take into consideration the material, style, wear-ability, size and price. Similarly, with car financing you need to take into consideration different elements.

Here is a checklist you need to check off when looking up a car financing plan:

  • Documentation

You need to make sure you have all the necessary documentation for the bank to consider giving you the opportunity to buy the car. Also, different banks have different requirements so you need to check which banks you can approach. Usually all banks require bank statements, income statements and information regarding any loan that you might have taken in the past.

  • Monthly Payments and Interest Rates

You need to be careful of your monthly payments and interest rates. How much will you have to pay on a monthly basis? Will you be able to easily manage that amount every month? Different plans will have different interest rates and you need to go with the one that is suitable for you.

  • Contingency/Back Up Plan

The last thing you need to be careful of is if all of your plans will go as planned. Make a contingency plan. You need to make sure that you are paying your amount at the right time and if it’s possible before time. You can ask your bank if you can pay more and get finished with your plan before the discussed time period. The sooner you get done with the plan the better it is. Usually, you have to pay a small penalty for changing the original plan but in the end it’s all worth it because over the long period you’re actually saving on the interest payments.

We are sure there are other ways with which people compare different policies and we would love to hear about them. Please write back and let us know how you chose or would choose the best car financing policy for yourself!