Buying a Vehicle

You are on: Considerations tab

Buying a vehicle is always a big decision and, for many of us, it is one of the most expensive events in our lives. It’s easy to get carried away and buy the most expensive, luxurious car you can afford but remember, after you buy it, you have to maintain it and you may have other life goals to achieve. So, there are a few things you should consider:

Getting Prepared

• Is buying a car a priority in light of your other life and financial goals such as buying a home or investing in education?
• What price car can you afford without sacrificing other life or financial goals?
• How much of the purchase will you fund from your savings and how much do you need to borrow?
• Have you realistically considered and planned how you will cover all the costs involved in buying your vehicle? E.g. insurance, cost of parts, annual tune-ups
• Other than price, do you know what to look for when buying vehicle insurance?

Consider all Costs

Don’t just look at the price tag on the vehicle. There are several other costs to consider… Examples are:

• Cost price of vehicle (showroom/2nd hand vehicle)
• Accessories/ add-ons if desired - security systems, car alarms, tracking devices, new tires or rims, sound systems etc.
• Transfer fee (may apply for used vehicles)
• Legal Fees -Attorney fees and stamp duty to register the Mortgage Bill of sale (applicable as per country) 
• Vehicle Insurance - Coverage required to meet legal and bank requirements
• Debt insurance/estate protection (optional) -will repay the outstanding loan balance in the case of death.
• Search fees -A search to verify any outstanding debts on vehicle (applicable as per country) 
• Valuation Report - A report to determine the current value of a used vehicle

You are on: Funding tab

Funding the purchase of your vehicle:

• Option 1 – Use existing savings. If you have funds set aside, you can use your savings. However, for most of us, that may mean using all your savings to use for only one life goal.
• Option 2 – Set up a Savings Plan. If you’re not in a hurry, you can set up a savings plan specifically for this purpose. Bear in mind that it may take you a while to save the total amount required to purchase a vehicle.
• Option 3 – Taking a Loan. Most of us would need a loan when we’re ready to purchase or accessorize a car. There are loan options for: Buying a new, local or foreign used car or fixing up one to look or run better accessorizing a new or used vehicle and paying car insurance (premium financing).
• Option 4 – Part Loan/Part Savings. Many people choose to use some of their savings to reduce their borrowings.

Since most of us will borrow to pay at least part of the total cost, we have complied answers to the most frequently asked questions about vehicle loans, plus some additional guidance on life after the big purchase.

Anyone who meets the following criteria can be considered for a vehicle loan:

• 18 years and over
• Earning an income that can be substantiated and is sufficient to cover the monthly installments
• Employed by a reputable company
• If it is estimated that a client will reach retirement age during the tenure of the loan, the repayment capacity calculation is made based on the current income and the pension income. The client must be able to carry the loan in both scenarios.

You are on: How much can I borrow tab

This depends on:

Whether the vehicle is new or used. Your income and existing debt when combined with other fixed monthly obligations, your combined monthly commitments (inclusive of your vehicle installment) should not exceed 40% of your gross monthly salary.

Do you need any funds to start the process?

The answer is yes.
Costs directly associated with the loan:

• A down payment is usually required when buying a vehicle.
• Service Charge on the loan - Costs to obtain reports and certificates required to get the loan; Cost of Valuation Report for used vehicles (this is paid to the valuator)
• Funds to pay for Vehicle Insurance (this is paid to the Insurance Company and may be financed by the Bank)
• Legal fees and search fees (applicable as per country)

Saving the down payment and closing cost

If you intend to buy a used vehicle you should save for your down payment and closing cost by setting up an automatic or forced savings plan. This way, by the time you are ready to buy your vehicle, you will have the down payment required. Ask anyone of our friendly sales staff how you can get these savings started.

Is any security required?

The answer is yes.
The vehicle is usually held as security. The vehicle must be insured with the necessary coverage that meets the Bank's requirements for the duration of the loan, however savings could be used once it compares with the value of the loan being requested. It is preferred that your salary should be assigned to the Bank.

What kind of documentation must I provide when applying for a loan?

You will need to provide identification, a job letter, pay slips and proof of address to name a few. Our sales staff will be happy to discuss with you the specific details of the documents needed as it relates to loans being granted for new or used vehicles.

You are on: Terms and Conditions tab

Include your partner’s income.

Any other individual’s income can be considered when qualifying for the loan. In such cases, this individual will be used as a co-borrower or guarantor to the loan.

Use a guarantor - A guarantor is a person who agrees to pay someone else’s debt should he or she default on a loan. The guarantor is considered part of the loan application and his/her credit will be evaluated with the other applicant/s. If the lending institution feels that the guarantor will be able to pay back the debt, the loan will likely be approved.

Show evidence of:

• A good employment record (stability).
• Good savings habits
• A good credit rating/history

What will be the term of the loan?

Generally, these loans are 1 - 5 years, depending on the type of vehicle, longer terms maybe possible. Some Caribbean countries the term of the loan may vary as: 3 years (used cars); 5 years (new cars).

Interest and Installments

The interest rate determined by market conditions at the beginning of the loan.
Generally speaking, your monthly installments will be lower if you:

• Borrow for a longer term. Longer terms are possible for high cost vehicles after consultation with us. However, the longer the term, the more you will pay in interest. So you have to weigh affordability now versus total cost.
• Borrow at a lower interest rate - if you provide more equity, you may be charged a lower interest rate.
• Look out for our vehicle promotions which occasionally feature preferential rates.

Remember:
Longer Term = lower monthly installment but higher interest cost.
Shorter Term = higher monthly installments but lower interest cost.

You are on: Insurance tab

We highly recommend that you take fully comprehensive insurance which covers:

• Legal liability for bodily injuries to third parties and damage to their property
• Loss of, or damage to your vehicle by accident, fire or theft
• Hospital expenses for the insured arising out of injury or sickness up to a pre-determined amount.

While Full Comprehensive Insurance is more expensive, there are options such as premium financing which make it more affordable by allowing you to make small monthly installments instead of one large annual payment.

If Full Comprehensive is still too burdensome for you, then you may explore options such as Third Party Insurance. This may be an immediate but costly alternative solution because if you do get into an accident, you will have to pay full damages for your own vehicle repair plus hospital expenses arising out of injury.

You are on: After the purchase tab

Things to consider:

• Saving for annual expenses such as insurance payments. You should realistically estimate the annual cost of car maintenance and save for it monthly. 
• Easy methods to track your car loan and other related expenditure:
  - Always monitor your accounts to ensure that your loans are being paid;
  - Know the balance in your car expense savings account in the event of an emergency;
  - Utilize Internet, ATM and Telephone banking services to monitor your accounts and keep track of car expenses;
  - Ensure that you have enough funds to cover your loan installment;
  - Confirm loans and standing orders are being paid on time. 
• Convenient tools to pay mechanics and other suppliers such as Credit Cards. When shopping for car parts or paying mechanics and car dealerships for maintenance work etc. a Credit Card is a very convenient tool. If you already have a Credit Card, you may need to request a Card Limit increase depending on the cost of the service or items being purchased. Chequing accounts with an overdraft facility extra funds are always required when fixing up or buying a vehicle, so, these facilities will come in very handy as payment tools during this period.
• Ensure that you have easy access to your savings through the ATM as you may need to access these funds for emergencies.

Review

• Set up an Automatic Savings Plan to for the costs associated with buying the vehicle and annual car maintenance expenses such as minor repairs, car insurance, changing tyres etc.
• Call us to find out about our financing options to purchase new/used vehicles or fix up an existing one.
• Open Credit Card and Chequing Accounts to purchase parts and pay suppliers.
• Ask us for Premium Financing if you prefer to pay your car insurance with small monthly installments instead of one major payment for the year.
• Use Internet and Telephone Banking (where available) to easily track expenses and ensure loan payments are being made on time.
• Call us to find out how much you can qualify for before you go shopping around. This gives you an advantage over the other buyers by showing the seller that you have your finances in place and you are serious.