Getting a car is one of the major milestones in life, next to getting your own property and starting a family. Naturally, your next question will be “How to buy a car?”. As it is one of the first major steps in life, you will require time to familiarise yourself with the process, which is why we are here to guide you through.
Generally speaking, a car purchasing process will be a combination of decision making processes and a number of finance and legal processes such as car loan applications. Read on to find out more in detail.
Step 1: Visiting the Showroom & Getting a Test Drive
Most purchasing processes start with viewing and understanding the product – the same applies to cars. The more recent car models will always be on display in the car manufacturer’s showroom, so paying a visit is only natural. Before you head over, do check Toyota’s amazing monthly deals!
As you arrive, you will get acquainted with the sales advisor that will describe the car models in question while answering any questions you may have such as the car’s performance, personality, pricing, and specifications. Click here to locate the nearest Toyota showroom.
After learning more about your dream car, the next item on the list is to sign up for a test drive by speaking to our Sales Advisors. In an attempt for car manufacturers to demonstrate the quality of their vehicles, a test drive is now part and parcel of the purchasing process. During a test drive, you have the luxury of being behind the wheel, experiencing everything the vehicle has to offer from performance to features.
Step 2: Starting Your Car Loan Application Process
a) General Process Breakdown
A car loan is also referred to as a hire purchase loan among people in the industry. For clarity, the process will usually be handled by the sales advisor, and the process includes contacting and negotiating with bankers, identifying the best financing rates, and the preparation of the necessary paperwork.
The other half of the process are the various car loan application requirements that need to be fulfilled from your end. You will have to decide on the loan repayment period, ranging from 3 to 9 years.
Subsequently, you will be required to submit the documents needed to buy a car, which are proof of income documents. These documents include:
- 3 Months’ Payslips
- EPF Statement/LHDN Statement
- Bank Account Statements
Should there be more documents needed from your end to buy the car, your sales advisor will advise you accordingly. Once all the documents are processed, you will have to wait a solid 1 or 2 weeks (maybe longer) to get the results.
b) Applying for a Car Loan as a Fresh Graduate
What happens if you are applying for a hire purchase loan as a fresh graduate without any work experience of proof or income?
In such situations, documents that suggest you have successfully secured a job such as a Job Employment Letter or Offer Letter, and also the addition of a guarantor (usually your parent or legal guardian) will be required for the application.
c) Car Loan: Margin of Financing
In most cases, hire purchase loans will service up to 90% of the car’s price. This means the bank will require you to pay the remaining 10% of the car’s price in order for the loan application process to begin.
Well, what is a down payment?
d) What Is a Down Payment or Upfront Payment?
Also referred to as an upfront payment, a down payment is a lump sum payment made upfront, typically required for loan applications, including housing loans.
For most cases, down payments require you to pay 10% of the car’s price. Should you choose to pay more than 10%, the monthly repayment amount will be reduced accordingly, after considering other factors such as interest rates and Malaysia’s Base Lending Rate (BLR).
Once the loan is approved, the bank will revert with an offer letter that indicates the terms of the loan, including the financing rate and repayment terms such as duration and monthly instalment amount.
If you would like a simplified yet detailed breakdown of the monthly instalment amount, you can always depend on the ultimate car payment calculator by Toyota. This car payment calculator is very convenient and easy to use as it allows you to select the Toyota car model you desire before typing in the numbers.
Step 3: Upon Approval, Get Your Car Keys and Begin The Drive
Once the car loan is approved, your sales advisor will task you to select your vehicle registration plate, where you will have the option of booking a specific vehicle number or use the one that’s assigned to you.
After that, you will be the proud owner of a brand new car, and life only gets better from there.