Caught up in excitement over car loan

A Fin24 user realised too late that he had fixed his car payments at a rate of 16%, and wants to know if he can change it. He writes:

I would like to know if it is possible to lower the interest rate on my vehicle.

I bought the car with WesBank in December 2011 and was so excited about being approved that I forgot to check the interest rate.

I only realised a couple of months later that the interest rate is fixed at 16%. I believe my credit record is above average as I check it every four months.

Rudolf Mahoney of WesBank responds:

Unfortunately it is not possible to change the interest rate on a car finance account once the contract has been signed.

You have the option to opt for either a fixed or a linked interest rate before signing the contract, but once it is signed it is set.

The rule of thumb is that when interest rates are low you should opt for a fixed interest rate, and when interest rates are high you should opt for a linked interest rate; however, the buyer is free to choose. 

In order to negate possible mistakes caused by the excitement and emotion when buying a new car, one should thoroughly research the purchase, as well as the various finance options, before visiting the showroom.

 - Fin24

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