Tuesday, March 27, 2012

Vehicle Finance - What You Need to Know


Instead of leading to other forms of loans, vehicle loans designed to meet the specific needs of the soon to be car owners. Vehicle finance now allows more people the opportunity to reach a vehicle without first having a great time saver. It 's also relatively easy to apply and the process is not too long.

Then, once the funding was approved everything that is required is pay a small upfront payment and the rest in monthly installments, becoming a part of your monthly liability.

Vehicle finance options

The two types of vehicle finance options are: - hire purchase contracts and leasing contracts of sale.

Installment sale agreement: the vehicle belongs to the dealer or private seller who purchases the vehicle. Payments are made over a period, and after the last payment you will have full ownership.

The interest rate for this option can be fixed or variable in nature, and the maximum interest that can be charged by a financial institution is governed by Act of Parliament (National Credit Act).

A contract for sale of lease: With this option you can rent a vehicle by the owner with the option to buy at the end of the contract. The advantage of this option is that you will have the convenience of having a vehicle without the property outright and you might get a tax return.

What are the legal implications of purchasing a vehicle?

Anyone under the age of 18 can not apply for funding of the vehicle.

As the buyer has the right to receive a vehicle without a concealed defects, but only if you purchase the vehicle through an authorized dealer.

Your responsibilities are:

• Keep your vehicle in perfect condition until the final credit agreement was paid
• To ensure that the deposit was paid and the remaining installments
• Ensure that the vehicle is insured
• To take delivery of the vehicle on the date agreed

If you default on your repayments, the finance company has the right to:

• sue for arrears
• The claim for damages by you
• Cancel the contract of sale
• repossess the vehicle

The signing of a surety:

If you need someone to stand surety for you in order to qualify for the credit, remember that if you fail to make a payment, the financial institution may hold the person who signed for you personally responsible for outstanding payments. The financial institution will still guarantee that you will be financially sound to make the payments.

Finally, make sure that the vehicle comes with a warranty. A good dealer to provide additional services such as finance and insurance for the vehicle license for the vehicle, a vehicle condition report, certificate of compliance with technical standards etc.

Source: http://EzineArticles.com/6760127

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