Consumers are increasingly under financial pressure, with new car sales figures for February, at 27 000, reflecting a 13.3% decrease from February last year.
* Quick tip: Tell the dealership you want to pay the once-off initiation fee upfront in cash so that it is not added to the full-term loan and you don’t pay interest on it. He explains that choosing a balloon payment and a repayment period of 72 months means that the capital portion of the loan doesn’t decrease as quickly as when the loan has no balloon payment.
Withdrawing a lump sum from your home loan facility and using it to pay cash for the car can be a good option because it means you pay a significantly lower interest rate. However, you must structure your repayments so that you pay off the lump sum amount borrowed over five years and not the full term of the home loan, which is 20 years.
Gradidge’s advice ties in with Mkhize’s observation that consumers are making multiple finance applications.