What comes to your mind when you hear the word "car loan"?

Many people decide to get a car loan with the reason "If you don't have credit, you won't be able to buy your dream car", are you one of those people who think like that? This one vehicle does have many advantages such as fits a lot and it doesn't overheat and rain.

Unfortunately, the price of a car is too high, making it difficult to reach, which makes credit the right choice. Just imagine, the cheapest new car price is currently IDR 120 million and that doesn't include car insurance that can protect the vehicle, this will certainly take a lot of time to raise funds to buy the cheapest car and include insurance in cash and which is definitely not in accordance with the car of your dreams.

Although credit is considered the most appropriate, but are you sure you choose a car loan? Take note of the following 10 things from  Malacca Trust before credit.

Is this a need or a want?  
Some people, when they have a desire, actually make it a need. For example, if you want the latest model of cellphone, even though you still have a cellphone at this time, for reasons that it is slow, not yet 4G, and a million other reasons, your desire to have a new cellphone becomes a necessity.

We all clearly know that wants and needs are different things, and of course it is the needs that are the most important to be met. So is this a need or a desire to increase your prestige ?

What is your current financial condition?  
This is very important to note. Not only personal finances but also family finances and other future needs.

For example, you are an employee who lives in a rented house with the aim of being closer to the office, then what you have to take into account are; how much is your monthly income, monthly rent, electricity, and much more.

Calculate it by writing down the estimated expenses, calculate the total, then record every small expense you have, and check after one month, then you can conclude the amount of your main expenses until you finally know your ability to pay.

Choose a car according to your need or desire?  
Of course you already have an idea of ​​what car you will buy later. There are many types of cars nowadays, with almost the same specifications, you just have to decide what car to buy.

If you need a car that can carry a lot of things or transport your entire family, of course a car with a spacious cabin is the right choice, but if you need a car that makes your trip to the office easier, a car with enough facilities for 5 people is enough. enough for you.

If you look at the specifications of the car, although now the model is almost the same, the specifications certainly have differences.

In installments, but do you know the total price of the car?  
Car prices usually don't last long, going down 10% -15% in price after leaving the showroom, but not all cars are like that. Some even use the price to be higher than the purchase price. Usually the bank or leasing will take an interest of 20% of the selling price of the car.

So, you can calculate the selling price of the car plus interest from the bank or leasing. You can check it easily, especially in the digital era where all information is very easy to reach.

How is the down payment?  
Of course a car loan is not only about the monthly payments you have to spend but also the down payment (DP). Usually, the larger the DP issued, the smaller the installment payments and vice versa.

So it's a good idea to choose a DP that is large but doesn't bother or interfere with your monthly expenses to pay the monthly installments.

Collect at least 1/4 of the total price of the car to be purchased for the down payment of your dream car.

Leasing or bank?  
When applying for a loan, the two financial institutions above usually have their own advantages and disadvantages as well as their respective terms and conditions. Usually, the leasing company has a higher interest rate but the procedures and requirements are easier while the bank has a lower interest rate but the procedure is more complicated.

Banks also have have a choice in the interest rate. There is a fixed interest rate (flat rate) whose interest rate is fixed and will not change, and a floating interest rate (floating rate) whose interest rate follows Bank Indonesia interest rates so that when BI interest rates fall, your loan interest will also fall, and vice versa. .

You should choose the right insurance!  
Although not all financial institutions require car insurance, it would be very good if you choose to insure your car to prevent unwanted things from happening during the credit process. In addition, there are many benefits that you will get by using car insurance.

There are two types of car insurance options, namely TLO Insurance which only covers loss or damage severe up to 70% and All Risk which covers the whole. Malacca Trust provides all the insurance benefits you need.

How long is the installment period?  
Small monthly installments are very tempting, but the lower your installments, the longer your payment period will be. Small payments are indeed not too burdensome for monthly expenses, but imagine what will happen in the future, there are so many unexpected things ahead. 

It's a good idea to start taking into account the future, for example in the next 4 years you will get married and of course it requires a lot of money, so you should complete the installment period before the 4 years.

There will be a lot of additional expenses, you know!  
Car loans are not just about paying monthly installments, of course there will be many other monthly expenses. The most basic example is that a car requires proper fuel and maintenance so that it is always comfortable when driving, this of course requires funds and adds to your calculation of expenses.

So you have to add a number of "other expenses" funds in your monthly expense record to anticipate it.

Are you sure that a car will be more effective?  
The hustle and bustle of the city which is almost always jammed makes it increasingly difficult for cars to move. Especially in Jakarta, because there are too many cars, regulations are enforced to reduce congestion, starting from the 3-in-1 until now odd-even rule was also implemented with the aim of reducing traffic jams due to the large number of vehicles.

So? Are you more sure about a car loan or not?