What’s the first thing that comes to your mind when we mention ‘car loan questions’? These do not refer to questions that you should be asking the car dealer or the company financing the car. Rather, by car loan questions, we mean honest and sincere questions that you need to ask yourself before you apply for a loan.
Are you wondering why you need to ask yourself these questions? It’s simple – The answer to these questions will help you know if you should be actually be taking a car loan or if it is something you should postpone to a later time. Take a look at some of the questions below:
Do I Really Need This Car?
Is the car an actual need or are you buying it just because your friends and colleagues have cars? How do you know if it is an actual need? let us help you find out with some honest questions:
- Are you constantly getting stressed out from the struggle of your daily commute to work and back home?
- Are you spending so much more on transportation than you would have spent if you had a car?
- If you have an emergency in the middle of the night, do you have neighbours you can rely on to help you with their cars?
- Do you have a family of your own?
- Do you have a side business that requires you to transport things from one place to another? For instance, are you into product distribution?
The answer to these questions will help you know for sure whether you need to buy a car right now or move it to a later time.
Do I have a Steady Source of Income?
If you do not have a job or business that helps you generate some form of income, then you have no business owning a car let alone opting for a car loan. The truth is that buying a car is one thing. Fueling it and ensuring that it is well maintained is another thing.
Owning a car comes with some expenses that you will be solely responsible for. A steady source of income means that you will be able to repay the car loan over a period of time. The question remains the same – Do you have a steady source of income?
Can The Car Generate Income For Me?
Is it possible to own a car that helps you generate income while you repay the car loan that helped you buy the car? The answer is yes. Having a car does not mean you simply drive it to work and back home. There are ways your car can help you generate income. The most popular one in Lagos is to sign-up as a driver on a taxi hailing platform like Uber or Taxify.
You don’t necessarily have to do this to repay your car loan but it makes it easier; especially if you are on a lean budget. You can also run an independent taxi with your car if you prefer that option. You could also rent out your car while you’re at work. There are different options open to you when it comes to using your car to generate income.
Can I Still Afford to Pay My Rent?
After you take out your monthly instalments for your car loan, do you still have enough to cater to your basic needs? Your accommodation is crucial to your daily living and you need to factor this into your car loan plan. If your accommodation bills do not get in the way or your car loan, then, feel free to proceed.
However, if you draw up your monthly budget and your rent looks like it might take a hit, we suggest you reassess the situation. However, if you own your own home, then you won’t need to worry about rent and you can focus on buying your car via a car loan.
Do I have a Plan B If I Lose My Job?
If you are a salary earner who works 9-5, then you probably already know the importance of your monthly salary. The strength of your salary directly reflects on whether your car loan application will be favourably considered or rejected outright. You probably won’t lose your job but you must always plan for unforeseen circumstances.
What Kind of Car Do I Really Need?
Trying to secure a car loan without having a car in mind is as good as hunting in the dark without a weapon or prey in mind. This is not how it works. You should do your research to know the kind of car that suits your lifestyle and immediate needs. An ideal car should be functional and should not just be another acquisition you intend to show off to your friends and associates. Draw up a list of cars that are easy to maintain and pick on that appeals to you the most.
How Much Do I Know About Vehicle Maintenance?
Having a good car maintenance culture is just as important as buying the car. Without a good maintenance culture, your car will most likely spend more time at the mechanic’s workshop than it does on the road. The way you maintain your car goes a long way in determining the lifespan of your car. Do you really want to buy a car you can’t maintain or are you willing to put some effort into enhancing your car maintenance knowledge/skills?
How Realistic is the Repayment Plan
Can your monthly budget cope with the demands of a repayment plan for a car loan? If you earn N60,000 in Nigeria, getting a car loan might not be a wise decision. According to auto experts, the minimum you need to earn monthly to secure a car loan is N150,000. This gives you room to draw up a repayment plan without putting you in a difficult situation.
Final Thoughts on Car Loan Questions
You need to be sincere with yourself when answering the aforementioned questions. A well-planned car loan helps you secure a good car without stress. Now that you have answered these questions, are you still interested in a car loan? Let us know in the comment section.