For the first time in my life, I am applying for a loan from the bank.
After 14 years of service, our old car proved itself too inconvenient to maintain (i.e. it stalled on my husband one night on his way home... had to be towed and it cost us to get it running again). So number 4 on my list is about to come true!
My husband is mortally afraid of credit, for some reason. We can't even use our credit cards much without him getting all tied up in knots. We always end up paying for our credit card purchases within the week. Until last night, he was contemplating paying for the new car in cash, which will mean pulling out some of our savings that we put on investment plans which I strongly opposed because the market is doing well right now. After much discussion (and stress!), he finally agreed to the loan.
Here's one thing I learned about the entire process: You need money when you apply for a car loan.
Ironic isn't it? ;)
Here are a few things you will need to pay for in cash, which can not be part of the money you are borrowing from the bank:
1. Downpayment (or partipation fee or something). The bank won't give you the entire amount you need for your car. You need to shoulder part of the expense. This wasn't so bad in our case since we knew about this and we really planned to pay for at least 70% of the total cost in cash.
2. Registration fee. Sometimes you can get this for free if you are buying brand new.
3. TPL. Required for registration.
4. Comprehensive insurance.
5. Chattel mortgage. Ok this was the first time I heard about this. According to my mom, it's morgage you pay for a loan with movable collaterals. Movable collateral like cars. *sigh*
6. Add-ons. Leather seat cover (which I requested, surprise! surprise! It was just so pretty!), rain guard, sensors, undercoating... etc., etc... all foreign words to me but apparently, we need it and it's not part of the car price so we will pay additional for it.