Car finance is great. It allows you to make that big purchase to get a new car. It won’t put you in the poorhouse either. There are some things you need to know though. It’s not all easy.

You can’t just sign a piece of paper and walk away with a car. Here are five things you need to know about car finance.

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Payment Protection

If you can’t make the payments, say goodbye to your car. Before you even think about financing a vehicle, you need to have a steady job. You can finance within your means on relatively low earnings. It needs to be a stable position though. Freelancing work isn’t going to cut it. Not having a regular job means you may not be able to make the payments each month.

If you do have a stable job, you should also think about ensuring you have a financial buffer in case of sudden unemployment or loss of earnings. Stick some money per month into a savings account. If the worst happens, you can at least make a few more monthly payments on the car while you find other work.

Variable Rates

Not all finance plans are equal. Interest rates in particular can be variable. Visit http://frontlinecarloans.com.au/car-finance/lo-doc-car-loans.php for low interest car financing. This will give you a more affordable plan, in the long run, as less interest it being added to the sum you already owe.

Shopping around for your car finance is all part of the process of getting it. You don’t go with the first finance company you see. You find a plan that works for you. Some may have higher upfront costs but with less interest. Meaning you pay more per month but for less time. Others do the opposite. Find finance that suits your earnings.

You Need The Paperwork

Never lose your car finance paperwork. Car finance is something you are locked into for several years if not a decade. Things may change to the point where you need to go back to the original agreement to see if you or the finance company are doing things not within the agreement.

The Agreement Can Change

Part of why you need to paperwork is to know if there are any clauses dictating changing your payment amount. It could be after a few years your monthly payments start to rise. In the paperwork, it could have a line saying that payments will rise with inflation. It could just be that you are expected to start paying more after the first few years so you can start clearing the debt.

It is essential that you read the paperwork before you sign it. Ideally you want a cast iron contract between you and the finance company. Realistically, you will at least have to adjust your payments to inflation.

The core lesson of this guide is to read what you are given. Not properly looking into the details of your finance agreement can backfire on you. Don’t be ignorant with them. Read them over as much as you can.