When you find the car of your dreams, It’s really tempting to get the first finance offer that is shown to you. The first offer is usually the finance shown to you at the dealership. Finance offers at dealerships can be great with fantastic rates. However you need to remember that most dealerships are aligned to a small number of car finance providers so it’s worth shopping around.
Here are some things to know about car loans and a few of our favourite tips
The loans generally do not go longer than 8 years.
They can have a balloon payment at the end.
This is a one off payment, that you pay at the end of the loan. It helps reduce the monthly or periodic payments. If you can afford the payments don’t get a balloon payment. If you run into difficulty during the course of your loan then you can always ask for the loan to be deferred for a month or so.
Motor dealers can no longer influence the finance rate that you get.
This changed in November 2018 in Australia. So negotiating finance with the dealership no longer works, only the finance company can assess you for a better rate.
You can get better rates and our country has more finance companies than just the big four banks.
Your credit score can influence the finance rate you can get.
You can get your credit score from any of the three main credit bureaus in Australia (illion, Equifax and Experian).
If your car loan is secured against the finance and you stop paying your loan, the car can be repossessed.
It’s cheaper to pay outright for the car, than to get a loan.
However, loads of people would rather pay interest than pay up front for a car.