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Upgrading your car? Avoid THESE 7 common financial mistakes

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1. Not researching car loans thoroughly

Car loans are a common way to finance a new vehicle purchase. Before committing to a loan, thoroughly research various lenders, compare interest rates, loan terms, and fees. 

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2. Ignoring your credit score

Your credit score plays a significant role in determining your eligibility for a car loan and the interest rate you’ll receive.

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3. Overextending your budget

When upgrading to a new car, it’s tempting to opt for a more expensive model. However, it’s essential to set a realistic budget based on your financial situation and stick to it. 

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4. Neglecting down payment

While it’s possible to secure a car loan with little to no down payment, putting down substantial amount upfront can have benefits. A higher down payment reduces the loan amount.

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5. Not considering resale value

While it’s exciting to purchase a brand-new car, it’s essential to consider its resale value. Choose a car model with good resale value to minimize depreciation costs over time.

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6. Focusing solely on EMI

Many car buyers focus solely on EMI amount when choosing a loan. While a lower EMI may seem attractive, it’s essential to consider the total interest paid over the loan tenure.

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7. Ignoring additional costs

When upgrading to a new car, remember that the expenses don’t end with the purchase price. Factor in additional costs such as insurance premiums, fees, taxes, maintenance.

Image credits: Freepik
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