Finance Or Buy: What’s The Right Choice For Your New Car?

Having a car in today’s fast moving life has become more of a necessity rather than a luxury. However with the huge amounts of taxes that our government implies, the prices for even the cheapest cars are in the upper echelons of of those who belong to the middle class, which comprises of a good number of working men and women in our society.

Public transport in Pakistan might be an alternative however it has its own woes. The public bus system is running on decades old buses that are chock full of commuters and is more of a health and safety hazard given the way prople are filled to the brim in the morning and evening hours. When it comes to cabs and rickshaws, the fares tend to be so high that for some it might become difficult to manage spending a huge chunk of your salary into monthly fares. In contrast, having a car of your own means more flexibility as you can pick and drop family members to their workplaces or children to schools etc or it can save you money if you share your ride with work colleagues etc. Not just that, having a personal vehicle means you don’t need to worry about finding transport if you have to travel due to any emergency.

When it comes to getting a car, be  it new or used, there’s two ways to go about it. You can either make an outright purchase with your available funds or you can choose to get your car financed by a bank. Below we will list a few scenarios that may determine which one of these could be the right choice for you.

Affordability:
This is undoubtedly the most important aspect that will determine your decision. If a purchase is possible from your own funds without putting a financial burden upon you then you should go this route because when it comes to getting your car financed, the bank remains the owner of the car and you cannot sell or have it transferred in your name until you have cleared the amount due which can be a hassle if you ever need to sell the car again for some reason. It also depends if the particular model you wish to purchase is within your budget or not else car financing could break down the amount into easily payable installments making it more feasible to buy a car of your choice rather than settling for something lesser.

Duration:
The next criteria to ponder upon is how long you plan to keep your car. Basically if you are one of those people who like to drive the latest models or change to a new car after your current one has attained a decent mileage then you should purchase a car. On the other hand if you plan to keep your car for upto 5 years or more, then financing is the way to go as usually installments last that much and you get the added benefit of having to pay in smaller chunks while you get to use the car.

Change in need:
It might also happen that you plan to buy a smaller car now but in the near future you might need a bigger one due to family needs or any other reason. For this purpose we would recommend that you buy your car if you see that your needs might change in the near future. But if you think your car would fulfill your needs for the coming years, go for car financing.

Parking:
This is another important aspect last but not the least. If you have a parking area inside your residential premises that’s safe from arson or naughty kids damaging your vehicle then you can put your hard earned money all at once into purchasing a car of your choice so even if you park it inside at night you will have peace of mind that no one will attempt to damage your car in your absence. However if you park outside in the street then it’s feasible to get a car through car financing so as it ages, you will be paying for it gradually and by the end of the installments you will own the car and it will be old enough that minor damage will not have any physiologically detrimental  impact on you. Also in the case of theft, the bank will be liable to compensate for damages as it will be insured in the bank’s name and thus you will not lose any money.

These are some aspects that you need to keep in mind while making the decision of buying or financing your next car. On a general note we find car financing in Pakistan to be a more pocket friendly option. For any feedback please write to us at: feedback@smartchoice.pk

Khurram Zahid