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Financial Focus - Apr/May 2021

Plan before buying a vehicle

Plan before buying a vehicle

With the repo rate at a historic low of 3.75 % and the introduction of extended repayment terms, now is the ideal time to buy a vehicle. Planning your new wheels needs careful consideration:

Key decisions: Ask yourself what the vehicle will be used for. Is it for frequent off-roading, mostly city driving or a combination of both? Also consider other priorities such as fuel consumption, vehicle safety features and carbon emissions.

Vehicle preference and test drive arrangement: After shortlisting suitable makes and models, the fun part of test driving the cars follows. Enjoy getting a feel for the cars; how they perform in the city and on the open road. Once you have made your choice, approach your bank directly for financing.

New versus pre-owned? Can the budget cater for a new vehicle or should it be the cheaper pre-owned? Ask questions from reputable dealerships, backed up with research. Factors to consider here are mileage on the vehicle, its maintenance and service history, the expiry date of the existing service plan, number and nature of incidents that the car was involved in and how many previous owners it has had. Often, depending on the needs of the prospective owner, pre-owned vehicles are a good consideration.

Research: The Internet is an excellent resource for researching the specifications of a vehicle. Customers often use this research to specify the makeup of their desired vehicle to get quotes from a dealership. At this point customers should consider the instalment and insurance price as well as the maintenance cost before making the offer to purchase.

Budget and financing: Take into account that there are additional costs to consider, such as annual licensing fees, maintenance, insurance, fuel, repairs, parking, as well as wear-and-tear on items such as brakes and tyres – items that do not fall under service plans or the vehicle’s warranty.

Savings considerations: Customers are advised to keep a separate savings account for expenses not covered by a service plan or parts guarantee. Bank Windhoek’s Selekt Gold offering has a unique feature called “My Savings”. It allows customers to have as many complementary SelektSaver accounts as they like, linked to their Selekt Gold Account.

Close the deal: After completing the research, assessing affordability and obtaining tailor-made financing for the vehicle, the deal is nearly done. Customers should carefully read their contracts to understand the terms and conditions of any financing agreement, service and warranty agreements and to ask questions.

Once you are empowered and comfortable with all the information that is required, you can drive off in the vehicle of your dreams.

Cameron Klassen
Senior Sales Advisor
Bank Windhoek’s Vehicle and Asset Finance Branch

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