Let’s face it. We all love driving around in a nice new car. Windows down, pumping your favourite music while heading down to the beach in your shiny new wheels – we get it!
The first step when buying that new car is getting a loan to pay for it. There are many benefits of getting car loans that will get us those shiny new wheels sooner rather than later.
So, are you wanting to upgrade your car? Or do you want a new work vehicle for the business? Regardless what the reason is, let’s turn those dreams in to a reality!
How Do Car Loans Work?
Remember, car loans are different to personal loans, as you are securing the loan by the actual vehicle itself. This will allow you to secure a much cheaper rate, lowering your repayments. In fact, an unsecured personal loan will attract a much higher interest rate.
Once the loan has been paid off, you own it outright and the charge over the car is released.
You Can Get Pre-Approved Before You Shop!
Yes, that’s right! You can get pre-approved with car loans in the same way you can for a home loan. And it is highly recommended. There are so many benefits of getting pre-approved before you go shopping for your shiny new vehicle.
Keep it simple! If you go into a dealership and you are pre-approved, you can negotiate on the price of the car only. Not negotiate on a variety of different costs and hidden fees. If you have a budget you can go into a dealership and confidently tell them what you want to spend.
If you speak with a good mortgage broker, they can set you up with a pre-approval so you are armed and ready to negotiate.
Can I Really Get 0% Finance From A Dealer Directly?
This myth has been busted many times in the past. If the dealership is saying you won’t pay anything in interest at all on the vehicle, you should be asking yourself if you are getting the best discount on the car itself? They have to make up the difference elsewhere.
Be wary of extra hidden fees being added to the deal, or if you are planning on trading in another vehicle as part of the deal, do your homework to make sure they offer you a price that reflects it’s true value. It is not about 0% finance, it is about the dollar amount coming out of your pocket each month.
Can I Only Buy A New Car?
There are lenders that provide loans for vehicles that are not brand new. As the loan is secured by the car itself, there may be a higher interest rate applied to the loan if your vehicle is not brand new. You may need to get the vehicle inspected as part of the process also.
Some lenders will also put a limit on how old the vehicle can be, which may vary. As a general rule, lenders do not like to lend against a vehicle which will be older than 12 years at the end of your loan term. Classic cars are an exception to this. However if you do speak with a qualified mortgage broker, they will help you compare and get a rock solid pre-approval in place before you buy your next dream car.
What About Buying A Car Through A Business?
There are definitely opportunities for companies and sole traders to obtain finance for their vehicles. It is common that businesses are upgrading their vehicles on a more regular basis.
For example, getting a new ute or work vehicle for a tradesman is essential to running their day to day business activities. There are many options available that cater for these types of transactions and turnaround times for approvals are quite fast. Documentation requirements are often very simple for this type of application also.
So what are you waiting for? Are you ready to upgrade? Or do you need a new work vehicle? Compare the market with a quote from a mortgage broker and drive away in your dream car today!