Car…..

In the present world is a milestone in the life of every middle-class or an individual who works and aim to save by them to be able to afford a car themselves. In the present world as difficult as it is to buy a car there are multiple ways to buy a car and afford it with your monthly income. The banks and other loan providing/instalment agencies have made this task easier to own a car and maintain your lifestyle the way, but yet again there are also some technicalities involved to own a car this way. You need to be good at managing your budget and follow it to full stop with zero per cent deviation to be able to manage your car loan if used any of the loaning agencies aforementioned. You need to roll car costs into your budget, set up automatic savings, reduce spending and consider getting a side gig (a side job to support your additional expense).

Calculate your down payment

Choose a target amount to spend, and then compare a few makes and models to find out if it’s realistic. Once you figure the car you desire/want to buy what you need to do next is calculate the down payment. There is a certain amount of difference when you are buying a new car or an old car in the down payment which you make to the bank The more money you can come up with on your own, the better the deal you’re ultimately going to get, Making a higher down payment helps you qualify for loan quicker and makes you eligible for a loan on lower interest rates and affordable monthly instalments.

Moody suggests shopping for financing as you would for a car because pricing and terms vary among lenders. Apply to an online provider first, and then see if the dealer can offer a lower rate. Also before you jumpstart on the journey of car purchase remember that there is not only the cost of purchasing a car but its sales tax and registration that you need to pay at the time you drive your dream vehicle home.

Budget for car-related expenses

It is recommended following the 50/30/20 budget, which allocates 50% of your monthly income to needs, 30% to wants and 20% to savings and debt repayment. One thing that you need to consciously decide is that the vehicle your aim to purchase fulfils your “Need” or “Wants” category. A second-hand ( used car) or a brand-new one with upgraded features will both get you to work, but the latter is more of a “want” which one do you feel that you “want to buy”.

Keep in mind that your car payment and other ongoing costs, such as insurance, will become a part of your budget. It is pointed out and emphasized by many experts that the expenses related to your car e.g.: maintenance and taxes or anything else should not exceed more than 20% of your take-home pay.

Get quotes from multiple insurers and consider comparing insurance premiums with multiple providers on Smartchoice.pk, whereby just entering some of your car details u can get complete information regarding the car premiums against the benefits provided and it’s an easy way to save money along with some first-class free customer services and complete information regarding the policy of your preference.

Limit unnecessary spending

When saving up for an asset like your car, cut down on expenses elsewhere, Consider cutting down on “wants” spending temporarily and find ways to reduce your current expenses, such as off-handed, more than usual outings and some major gadgets expenses. Readdress the money you save towards your goal, to save for your car-fund. Keep a proper track of your spending, credit score, and even find fresh ways to save.

Set up a savings account

When you start saving its important to find a “safe” marked destination for your money. An account that shall be not be used regardless of how much you need funds, (if it’s not a health or life emergency, which can also be curtailed by acquiring the right health insurance for yourself and family) open a completely separate account so you don’t dip into your car funds.

If you have a few years to save up say you’re a university student and buying a car is a long-term goal, put your money in a high-interest savings account or certificate of deposit so it can grow and the amount can be multiplied. Leave these reserves untouched until it’s time to pull the trigger on a set of wheels.

Automate your saving Alarms

Once you have a place to store your savings, make regular contributions. You can do this with minimal effort by setting up an alarm/reminder that automatically every month reminds you to schedule transfer on your given date.

Pick up a side hustle-the more the hustle, the more money

To help close any savings gaps, think about finding ways to earn more money. A side job can accelerate your progress, but make sure it’s legitimate and worth your time before you commit. Saving hundreds of thousands of rupees can appear to be a daunting task, especially if you are looking to purchase your first car.

How in the world can you ever save that much money when you’re earning a minimum wage that barely suffices for your survival? Not to worry there are multiple platforms where you can work freelance like Upwork or Trello etc. plus you can always take up part-time work that compliments your skill set. Follow these few simple guidelines and you’ll be well on your way to saving for your first set of wheels.

Set A Goal

First, figure out what your goal is. Do you want to buy a new car? You’ll need to save a whole lot. Most financing requires at least 20% down. So if you are buying an average car at around Rs. 800,000, you’ll need to come up with at least Rs. 260,000. That’s also just based on a normally assumed price.

Don’t forget when buying a new car you’ll also need to come up with bank/dealer/facilitating agency fees which can rapidly approach another some tens of thousands. If you aren’t careful, as well as taxes and delivery fees and several other fees, so while making a decision and be prepared to face any such expenses that may come your way.

Buying a Used Car?

What about a new car? You can purchase a used car for a lot less. Typically brand new cars lose about 19-25% of their worth the moment you drive them off the car showroom. Say you are looking at an Rs. 800,000 car that means that the second you drive it out of the showroom, you lose Rs. 200,000 value of that car. That is a whole lot of cash whether you are just starting or making a ton of money.

That seems like a bad way to invest your hard-earned cash, doesn’t it? There’s no question that you can save money by buying a used car the question is how much. It’s kind of a mushy science.   It all comes down to few solid details, the year, the make and the model you are in search of, also understand and analyze how desperate the seller is, one thing of prime importance is which mode is procuring, whether you are buying from a dealer or are you buying privately from an individual?

One point that needs to be kept under your due observation is that buying a used car means no company warranty of guarantee. It can be an issue and it’s certainly something to take into consideration. If you buy from a dealer you’ll still need to pay taxes and title fees, documentation fees, transfer of title fee and there is a lot. If you buy from a private party you’ll still have to take care of the government fees (taxes and title) but you won’t have to worry about other fees.

Determine Your Budget

Once you feel like you have the basics covered, figure out your budget. Can you afford monthly payments? If yes, how much can you afford? And yes, you can finance a used car, too be sure to add in some wiggle room for things like maintenance, fuel and insurance costs.

Research Financing Options

Search and Research your available options for financing. We have a few blog posts to help you out. You should know that all of these financing options are available whether you’re thinking about buying a new or used car. Car Dealers also offer to finance but be wary of them as they are often instruments for big dealerships to sneak additional fees into the cost of your car. If you do decide to finance at a dealership know exactly what you are getting into and read all the fine print, read each line before you sign the contract and be sure that you don’t miss out on any clauses or details, how unimportant it may seem, pay attention to it.

Determine your savings plan

After visiting several car dealers, online direct sellers, newspaper ad sellers in your city, you’ve figured out the car you want and how much it costs. To achieve your goal let’s say within 12 months, you need a definite savings plan. You can start by saving 30 % of your monthly income and device your own savings plan, saving a certain percentage of your salary every month is a good and sure-shot plan for a guaranteed path to own a car.

Reach out to your Parents/Guardians

A strong indicator of self-independence and responsibility is that you want to own your car without constantly borrowing from your parents. Keep it up. Your parent or guardian wants you to succeed in life. This reason alone should inspire enough confidence within you to approach them for a little financing for your car savings project. No parent can say “No” if their child offers to save up 50% of the car’s price and pay for their auto insurance.

Ditch your credit cards

One of the most common behaviours, when we start earning, is to get a credit card immediately, it is also one of the major reasons the millennial is in debt all the time, be it peers or banks. Since you have already decided to build an asset one way of increasing your net income is by reducing or eliminating expenses.

If you take a hard look at your current and previous monthly expenses, you’ll notice some unnecessary expenditures, especially those that you have used your credit cards for. As to own a vehicle of your own you need funds and one way to achieve that can be through avoiding credit spending, don’t spend money that you don’t have. Just keep your debit card with you, owing a debit card will motivate you to save money every month because debit card means the money in hand and that would be the all you have to spend

Save up for petrol and car insurance in advance

Once you finally meet your savings goal and succeed in buying your dream, it opens another chapter of your car expenses that you are only solely responsible for according to the law of Pakistan, car owners must have at least third party car insurance. Since insurance premiums aren’t included in the car’s buying price, you need to save up early.

Saving up fuel money in advance is a good idea because you never know, keeping the Pakistan situation in mind if prices will shoot up right after you purchase your car. Your savings will provide a decent cushion because you won’t spend a huge portion of your net income fueling your car now and then.

Now you know how to Plan for Your First Car!

Do you earn a low income? Saving up for a new/used car is better than purchasing a car on credit or keeps it as your last resort to get a car. Buying a car is a very important milestone in the life of an individual and it makes a person confident in his or her capacity and gives a sense of independence to the person.

So Gear your car tool kit along with your savings account and get your 1st car today. Subscribe to our weekly newsletter to stay up to date with the latest restaurants, events, and wellness and travel tips. We are Pakistan’s premier financial product supermarket, enabling you to compare and make an informed decision.

Khurram Zahid

The post How to save money for your first car? appeared first on Smartchoice.pk.

There are different measures taken by the Auto Development Policy makers to make sure that the suppliers are dealing with the trustworthy models. It has helped a buyer to access a car that confirms to all the needs and wallet of the buyer. To alleviate the confusion of user, we have thematically divided the factors that play their role in influencing the buying decision of a person.

Since for many in the middle class of Pakistan, buying a car is the first big purchase thus they need to have extra attentive and concerned about the machine they are going to pay for. Although, once you have made your mind to buy a car for you, you will be seeing latest offered and a number of options around you. As a base tip, we would like to say that never get swayed by the colorful attractive brochures or the gleaming automobiles that you can see in the advertisement. To play safe, you need to consider the following steps in mind if you need to make a right buying decision.

Determine Your Needs:

First of all, ask yourself the reason for buying a car. Are you looking for a vehicle of your own to drive you down into the town? Are you looking for a mean for daily commute? Or are you looking for a vehicle that can help you to have a comfortable drive on the highway? Do you need to make a trip to another city, every weekend or less often? How many people will you have a drive on the regular basis?

Remember your lifestyle has a major role to play in the selection of the car. It helps you to understand what car you need to have in terms of size, capacity or mileage? Answering these questions clearly will help you limit your car search field and will help you make a decision quicker and smarter.

Generate Information as Much as Possible:

Once you have shortlisted the cars that suit your needs and lifestyle, it’s time to do some serious research. You need to generate information about the shortlisted make and models of the cars you are thinking to choose from.

Researching is made easy with the advanced internet services. They can generate you information in bulks.  Review the handling comfort and other classifications of the cars you are focused on. Compare the results and filter your shortlisted cars to find the most suitable option to consider. To make sure that you have to access authentic information, visit the official website of the manufacturing company. Official company websites provide the most accurate information about the specifications and abilities of a car. They will also give you the actual price of the car.

Reviews are another important part of the research; you need to check what existing users had said about the car. For reviews you can also visit third party websites that are dealing with the supply of cars, users do leave a comment about their experience on such websites.

Your Financial State:

Money is the most important factor when it comes to buying anything, big or small. As cars and homes demand some major investment, the money factor becomes the backbone of the entire scenario.

Before taking the driving wheel of your very first vehicle, you need to make sure that you have sufficient amount of money to make the purchase. If you do not have enough money to pay in cash, you may need help from the bank. Banks may help you figure out your borrowing capacity according to different payment modules. They may offer you a three to seven years plan to pay for the car. However, this facility is served along with a specific and pre-defined interest rate. Once you have sorted out the payment procedures and amount, you will be able to narrow your search and focus on the make and model that is in your budget.

The Periodic Charges:

Have you considered the recurring charges that you will have to deal with, being a car owner? Yes! We are talking about the maintenance, petrol and parking charges etc. Counting all these charges in your monthly budget, along with the installments for the bank will make the car quite expensive for you. So you need to make sure that you are able to afford these periodic payments before you proceed to buy a car.

The Insurance Quote:

Now, this is something that offers you a broad field to play in. There are banks that offer insurance service when you ask them for a car loan or proceed to have a car on installments, and then there are companies that are specifically dealing with insurance services. These companies are then divided into different categories of insurance. Auto insurance is something that will work for you when you are signing an agreement to own a car.

Car insurance is highly suggested by experts to keep yourself, your family and your car safe. Before buying a car, get an overview of the insurance premium and what plan you are willing to go with. As different insurance companies offer different auto insurance plans. You can check all the basic details about Auto Insurance by clicking here.

A Vendor You Can Trust:

You will need a dealer to buy a car. This rule implies to both used and new car sale and purchase. If you are looking for a used car, you need to get it inspected by an expert to make sure that the car has genuine parts and the condition of the vehicle is eligible to be purchased. You can ask a trusted friend or family member whom you think have had enough experience in dealing with car assessment. If you think that a seller is pressurizing you, the doors are open and you must move to another seller. You must keep in mind that there is no time to rethink, once you have booked the car, signed the agreement, there is no way back.

Look for Bargain:

If you have fallen for any specific car, you must visit the official website of the manufacturers. To check if there is any promotion available. The automobile companies keep offering a discount on different occasions. So you can wait a bit for the upcoming offer or can go for the recent one if any.

Try Before Buy:

Select and shortlist models and try them on the roads that you will usually be driving on. You can compare the performance and check if they are fun to drive or not. If you are keen to buy a car of specific model rent the same model and drive for about 1000 km. This trial must take 3 to 4 days before to you jump on the final decision.  Check how comfortable you feel driving it. This practice will give you a clear idea of how you will feel while driving a car of your choice. Check if the seats are comfortable and if the trunk is big enough to fit in your average luggage. It will also give you an idea about the consumption of fuel and will help you establish a clear idea about other ongoing costs.

Safe Some Extra Money:

If you have managed all these things wisely, you will surely be in your budget. And if it is really so, you can have the freedom to think about changing the color of the car. Or you can refurbish the interior of the car. You may think about adding a gadget to the dashboard or upgrade the music system. Certainly, for all such tasks, you will have to pay extra amount but you will have a highly personalized car that you will enjoy having for a long run.

Reading Terms of Agreement:

Before you sign the agreement, make sure that you have gone through all the stated terms and conditions. It may include delivery charges or any other additional cost. Being a buyer you have the right to get expert help by letting them review the contract and ask for a legal opinion. Keep in mind that there is nothing bad in getting a car of your choice but, getting stuck in?? something is never a good idea. Being careful is better than being in a problem.

New Car Vs. Old Car

There is a difference in buying a new car versus buying an old car. And here are the points that you must keep in mind while looking cars in any of these categories.

What Do You Need to Consider While Buying a New Car?

No one wants to regrets, especially while making a major purchase as that of a car or property. With a perfect plan of action, you can save yourself and avoid feeling guilty of signing an agreement that won’t work for you. Here are few points that you must keep in mind while buying a new car;

• Check for the possible options in a market
• Look for the most demanded item and what customers or users have to say about it
• Never compromise on your budget and try to find an option that suits your budget
• Research for the product as well as the company and check if any platform is offering a discount on it
• Consider the resale value as it is one of the most important things to keep in mind while buying any such thing. The resale value of the car depends on the condition make and model of the car and how well it is working in the market and on the roads
• Spare parts are other important elements that you must keep in mind while buying a new car. Make sure that the spare parts of the car are easily available in the market
• While buying for a vendor check for what after sale services are offered by the seller

What Do You Need to Consider While Buying a Used Car?

It is not necessary that you must buy a new car. You may get many options in used cars that are economical and can be a good return on investment. You may not know how the car had been used by the previous driver thus you will have to pay extra attention before paying for the car. Here are some quick tips that you need to keep in mind while buying a used car;

• Decide the type, make and model of the car you will prefer to find
• Start searching for the specific car type in the showrooms that offer use cars of that model
• Do not go for the new model cars, they may cost you more and if you opt to buy a used car of the latest model, suggested would be to buy it brand new.
• What are the arrangements of the parking area of the car?   Do you have enough space that is secure and you can place your car overnight?
• Check for the maintenance records to have the idea what changes have been done in the car, over the time. It will also include the assessment of the spare parts of a car.
• You will need to check many other things before buying it. You can check for the condition of body parts, gear knobs, foot pedals, switches and steering stalks, roof liner, windows and door panels etc.
• Checking for the noise in the engine is also a must before paying for it.

Documents that You Will Need While Buying a Car in Pakistan:

Up till now, the only thing that matters is money. Once you are done with the car selection, you need to pay attention to the documentation process. Without proper documentation and signed agreement, you cannot proceed with owning a car if you have not done proper documentation. It is a sensitive matter and you must handle it with care.

• The On-Road Costs: It is the overall charges that you need to pay to own the car legally. It is the combination of a registration fee and the insurance of a car in general. The registration includes; motor vehicle tax, withholding tax, multifarious and motor vehicle registration etc.
• Excise and Taxation: If you think you can skip it, you are wrong. They are the first one to be paid on the list. You can get all the information about the fee and processing from the website.
•  List of Main Documents for Application: You need to have a photocopy of your CNIC or person on whose name the car will be purchased and application to the excise and taxation officer for registration of the new vehicle.
• Document verification: For different cases, you need to have different documents for verification which include; sales certificate, sales invoice, auction Boucher if any and interrelated documents and bills.
• Residential Proofs: There are some basic documents that you will need to provide which includes; CNOC, utility bills, lease agreement, appointment letter and registry.

Although it may sound simple, buying a car demands a high level of experience and knowledge in each process. If you are buying a car for the first time in Pakistan, you need to make sure that you have completed all the necessary documentation and procedure and you are the legal owner of the car.

Khurram Zahid

The post How to Buy Your First Car in Pakistan Even If You Have Little Knowledge About Cars appeared first on Smartchoice.pk.