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Bankers Diary

Is Your Vehicle Worth the Cost?


In a developing country like Pakistan, where mass transit system hardly exists, common people even with limited buying power tend to buy their own Vehicle. The cars are expensive as local auto industry has not developed a lot. Most of the people rely on imported cars and other vehicle which are costly. In such a situation, the buyers have to look for many things before finalizing the deal for Vehicle. In the following lines, few guidelines are being given for potential buyers of Vehicle. Will shed some light on how do you can arrive at a point where you are positive that your car is worth the cost.

Since the introduction of car financing at affordable rates, most of the new car owners in Pakistan now buy a car through car financing or auto loan offered by several banks and other financial institutions. Before finalizing a loan plan, first thing to evaluate is the kind of loan you are seeking to buy a new car. For a high salaried executive, buying an expensive Mercedes or Audi can be very easy.


At the same time for a mid-level executive paying loan installment for a low end car can be taxing on limited income. It is therefore necessary for the person seeking loan to first evaluate his income vis a vis expense. Moreover, down-payment is also an important factor and it should be considered before applying for loan. Borrow only what is easily repayable.

Every buyer should also decide the car which fullfils his and his family’s requirements. The corresponding model of the car must be known to the buyer. Exact specifications like fuel consumption, types of tyres, number and comfort of seats, space available for luggage must be thoroughly checked and known to customer.

Daily running of the car must be kept in mind while finalizing the deal as a car which consumes a lot of fuel can be a nightmare only after few months. Therefore, if a customer selects a car which is expensive and have higher engine configuration it’s not the worthy on two accounts:-


1. The cost of auto finance; meaning the installments will be significantly high because of rate of interest combined with principal amount
2. The insurance premium also calculated on the total cost of the vehicle irrespective of how much you have paid as a down payment

Another important aspect while finalizing the car is the maintenance cost of the car. Imported cars are difficult to maintain as there spares are not readily available. Moreover, it becomes more expensive for high end models of Toyota, Honda and Corolla. Cars up to 1000cc are easier to maintain and are not a heavy burden on a person’s wallet.

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