What are the advantages and disadvantages of a new car loan? What if someone chooses to credit a used car? This time we will discuss some of the advantages and disadvantages of buying a car on credit, both new and used.
Understanding Car Loans
Cars can be purchased in various ways, both in cash and credit. Crediting a car is an attempt to buy a car by installments or installments through a certain system. Car loans can be made at authorized dealers or other distributors. At present, the price of car loans has begun to be affordable so that more people are interested in crediting cars.
The Need to Credit a Car
Sometimes, buying a car has become a primary need for some people. For example, if you are more than 30 years old, the workplace is far away and you have to go home at night. Without the presence of a car, of course, health conditions can worsen. Thus, for some conditions the car must be purchased if there really is no other solution to support the trip while working.
Considerations Before Car Loans
However, can everyone’s salary be sufficient to accommodate the purchase and maintenance of the car as a whole? Of course not everyone can do that. At least, financial conditions such as the large number of needs and only one person working in a family can be one of the factors. However, what if buying a car is considered very important and urgent? There are 2 general choices taken, namely new and used car loans. The following are things that need to be considered when deciding this.
Consideration 1: Mature Financial Calculation
Especially for new families, there will be a lot of unexpected expenses that must be paid such as home installments, birth and child care needs. For this reason, everything must be considered including taking credit for both new and used cars.
As a reference, car loans are usually far more affordable than new cars even though the conditions are not much different. The price of a used car loan that has reached a travel time of 100,000 km can be greatly decreased. As long as car maintenance is good, it is not impossible that the car can last up to 900,000 km. What is clear, the price of these cars will be far more affordable when compared to new cars that are even exact. This is influenced by depreciation in prices after use.
Both new and used, car loans can be taken immediately before paying off. If possible, the car can be used as a business such as rent or shuttle services so that the income can be paid in installments. Of course used cars will have lighter installments because of lower prices too.
In essence, as long as it does not exceed the predetermined budget and does not take other quota, purchasing a car can still be done. First hand used cars from trusted contacts can also be selected. Especially if the person is in need of a fee.
Consideration 2: Functional Value of Cars
All cars have the same functional value, namely carrying passengers and goods. Before buying a car, it must be ensured that the characteristics of the car are in accordance with the road to be taken, luggage that is often carried, the number of family members and other criteria. If the prospective buyer miscalculates in this case, the risk is that the car cannot be fully utilized.
The thing that needs to be underlined is that the car is not an investment object whose price has risen. Electronic goods and vehicles are not like land. The price always goes down because of innovation from time to time. We recommend that car buyers prioritize function and comfort compared to other considerations.
Consideration 3: Owner Social Interaction
The social interaction of prospective car owners also seems to be a factor in the selection of new or used cars. Outside the process of payment in cash or credit, the owner’s social environment greatly influences his thinking on what type of car.
For example, if someone lives in an intermediate environment, the desire to buy a luxury car will decrease. Conversely, if someone lives in a socialite environment, the desire to buy a luxury car also increases. It is different for someone who lives in a vulnerable area, so they will choose to buy a car as simple as possible so that they are not “glimpsed” by thieves.
Consideration 4: Big Step
Buying a car will be done by one person or only a few times in a lifetime. Therefore, the considerations taken must also be very serious. Because a car is not a cheap item, one needs to calculate whether it is able to buy and take care of it until the car is damaged.
For example, if a car costs Rp150,000,000 and is repaid for 3 years with a fixed interest of 7% per year, then the Circular Letter Number 14/10 / DPNP issues a DP provision that must be prepared in the amount of Rp50,000,000. Then the monthly installments are approximately Rp.3,400,000.
Consideration 5: Care, Insurance and Other Equipments
In addition to routine maintenance, it would be better if the car is insured because the rate of accidents increases over time. For this reason, there are several types of insurance that can be chosen.
# 1 Car Insurance Total Loss Only (TLO)
This claim can be taken if the owner experiences a robbery or car loss at a minimum of 75% upward. However, if the damage or loss does not reach 75%, then the claim still cannot be given. TLO insurance has more affordable bills. But the damage that must occur means that the car really can’t be used anymore.
# 2 All Risk Car Insurance
In simple terms, the All Risk insurance will guarantee all the damage that is mild, moderate, or severe that is experienced by the car. Starting from blisters to shreds, insurance claims can go down. However, this insurance bill is quite expensive because of the quality service too.
Consider carefully, your decision will determine the future
Both new car loans and used car loans, it is very important you know your personal finances. Consider your decision in choosing carefully, because the decision you choose will determine your financial future. If you are confused and have difficulty in making choices, it’s a good idea to find a financial planner to consult. This will keep your future awake and prosperous.