By Bank Windhoek's Vehicle and Asset Finance Branch, Senior Sales Advisor, Cameron Klassen.
With the Bank of Namibia Monetary Policy Committee's decision to keep the Repo rate at a historic low of 3.75 percent and the introduction of the extended repayment terms, this is the ideal time to buy a vehicle. However with any purchase, planning is essential. Below are some hints and tips when buying a vehicle:
Key decisions: Customers need to make a decision based on their needs. Questions to ask themselves are what the main purpose of the vehicle is likely to be; is it for frequent off-roading, mostly city driving or could this be for a combination of both purposes mentioned. Considerations such as fuel consumption, vehicle safety features and carbon emissions may also factor into your list of priorities.
Vehicle preference and test drive arrangement: Once the customer has identified a few cars that might fit their needs and budget, test driving the car is often the next step. Customers often want to get a feel of the car; how it performs in a city setting and on the open road. Once customers are convinced of their decision, they can approach their bank directly, such as Bank Windhoek, for financing.
New versus Pre-owned decision and affordability: Can the budget cater for a new or used vehicle? To consider a pre-owned vehicle might be an option. There are advantages and disadvantages to making this decision and customers must take the time to weigh their options carefully and 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 as well as how many previous owners any one particular vehicle has had. Often, depending on the needs of the prospective owner, pre-owned vehicles are a good consideration.
Research: Knowledge is power. 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 on article and maintenance cost of the vehicle before committing to making the offer to purchase.
Budget and financing: Finances when looking at purchasing a vehicle should be looked at realistically. Buying a vehicle is a long-term decision, and there is more than just the purchase price to take into account. There are vehicle annual licensing fees, maintenance, insurance, fuel, repairs, parking, and wear-and-tear items such as brakes and tyres expenses to consider that do not fall under service plans or your vehicle's warranty. Using the Bank Windhoek Vehicle Finance Calculator, available on the Bank's website, is a great way to calculate and project the car's monthly instalment payments. Once done, a customer can weigh it against their budget but they should note that this is only an indication on instalment and not all costs are included. Bank Windhoek can assist customers to calculate a pre-qualification amount according to the Bank's policies and determine repayment ability.
Savings considerations: Customers should also be 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 with the "My Savings" aspect. It allows customers to have as many Complementary SelektSaver Accounts as they like, linked to their Selekt Gold Account. When budgeting, customers can transfer monthly vehicle savings from their Selekt Gold Account to the SelektSaver Account via the Bank Windhoek Mobile App at no extra cost.
Financing options: With the terms and conditions in place, the Bank has the following financing options available, valid until Wednesday, 31 March 2021:
New vehicle- financing options:
- This option includes a ten percent deposit; 30 percent balloon payment; a flexible repayment period of up to 72 months; or
- A ten percent deposit, 30 percent balloon payment, repayment period of 60 months with the option of a three months repayment holiday. Customers can choose any three months within the first three years of the finance period undefined.
Pre-owned vehicle-financing options:
- In this financing option, a ten percent deposit is required on models not older than five years;
- 20 percent to 25 percent balloon payment on cars not older than two years;
- A repayment period of 60 months with the option of a three months repayment holiday. Customers can choose any three months within the first three years of the finance period.
Close the deal: After completing the research, assessing affordability and having approved tailor made financing for their vehicle, the deal is nearly done. Customers are strongly advised to focus on carefully reading their contract to understand the terms and conditions of any financing agreement, service and warranty agreements and to ask questions. Once the customer is empowered and comfortable with all the information that is required, they can drive off in the vehicle of their dreams.
For more information on vehicle financing, please contact Bank Windhoek's Customer Contact Centre on 061 299 1200.