CHENNAI: With the festive season finally here, many who can afford to are planning to buy cars since the public transportation system has begun to be seen as unsafe due to the pandemic. However, while safe transport is an important need, so is keeping financial problems at bay.
Considering that a car is a big ticket purchase for most people, there are many things one should chalk out clearly before committing to buy one. First and foremost is deciding how much to spend on the vehicle. Your budget needs to factor in the tenure of the debt (if you are taking a car loan), the interest rate you pay, the cost of insurance, etc.
Do your homework and research and also decide on which model suits your needs and budget best.
Another major factor is whether you want to own a used car or a new one. Loans are available for both, but one needs to decide what works best. You must ensure that you do not add to your financial stress, and used cars are cheaper.
“People usually like to buy high-end models, but remember that your car should bring happiness and relief, not additional financial burdens,” said S Jayakumar, Chennai-based financial consultant.
If you take a car loan, think long and hard on the right EMI burden. Factors such as interest rate and tenure should be considered deeply. Dealers may want to lower your monthly payment to make the car seem affordable, but they will just extend the tenure, and hence interest costs.