#BounceExclusive: How To Get A Cheap Car Loan (2)
Last week, we began this series on how one can secure an affordable car loan.
In the first part of this series, we told you how to look for a cheap car loan.
We also provide detailed requirement of what the lease company would request for.
In this edition, Bounce News tells you what happens during the process of choosing a car that you want to get a loan for.
Lease companies look out for a number of things before deciding to finance your car.
Below are some of them:
1. Year of Manufacture: Some where close to the driver's door you will find the month and year the car rolled out of the manufacturer's plant.
When you want to resell an asset, recovering the value left on that asset, in this case, the car, is paramount to the lessor and should be for you, even as an individual.
Let’s take a car manufactured in year 2000 for instance, it will not be as healthy as a car manufactured in 2008. And that affects the resell value when the time comes to recoup.
For some lease companies, “the car has to be at least 10 years old for Tokunbo and then 8-years for Nigerian used vehicle,” said Oluseyi Akanmu, a Sales Executive Supervisor at Rosabon Financial Services in Lagos, a company reputed for innovative auto financing solutions.
2. Mileage: The mileage helps you and your financing partner to know how much the car has been used. For the lease company especially, the mileage is critical in considering what car to finance.
Lease companies usually have caps on the mileage of cars they must finance. For some, the car must not have traveled more than 90,000 miles.
According to Akanmu, “if the car has exceeded the tolerable mileage, we may not be able to finance the vehicle and this is not because we do not respect your choice but because we also want to make sure that whatever we finance for you serves your purpose”.
3. Inspection: In order to determine the health status of what the car they are financing, the lease company must conduct a physical examination.
Normally if you want to buy a car, you will get a mechanic to check the durability and strength of the car.
This is what lease companies do too. Each of them has an auto engineer vendor or partner that conducts such inspections.
You do get to pay a fee for the inspection and it varies based on whether the car is Naija used or Tokunbo.
Usually, the vehicle inspectors sends a report to the company which is also accessible to you, the client.
If the car is healthy for purchase, the inspector will also present a market value for that car and it is the market value that the lease company will finance.
4. Market Value: The market value of the car you intend to buy is the price one should be able to get that car at that moment based on prevailing market conditions.
It is important to note that it is the market value that the inspector gives the lease company that they will finance and not the price that the car dealer imposes on it.
For instance, the car dealer insists on a separate market value other than the one the inspector has given the lease company, and where a renegotiation has failed, then the client would have to pay the balance to the car dealer while the lease company sticks to its inspector's opinion.
“My car goes for 3 million naira and nothing less” and the lease company’s inspector is saying the car is worth only 2.5 million naira in the market; the two parties have to renegotiate and come to an agreement.
But if an agreement fails and the client still believes that the car is what he/she wants, the he/she would have to pay the 500,000-naira balance.
To be continued….