If you have never financed a car purchase before then it may be that you are somewhat nervous about approaching your local car dealer asking about such things. You should know however that the procedure has been made a lot easier and a lot of the red tape has been removed. There is also a lot more protection in place and the Australian government has put many rules and regulations in motion so that you as a consumer are protected. This should give you the peace of mind that you need to get out there and find the car of your dreams.
There are a number of different car loans that you can apply for and it doesn’t matter if you are trying to finance a brand-new car or a used one because it’s important to know what you can afford and what you can expect when you do get approved for your loan. It’s important that you go into this with your eyes wide open and so the following is just some essential information that you need before you commit yourself and sign on the dotted line.
- Find out your credit score – Depending on your credit score, you will be offered different rates of interest when it comes to financing your new car. It’s better that you know your credit score before you start shopping around so that you know exactly what interest rates are available to you and if it is affordable. You get a better idea of the monthly payments that you will be expected to make and so you can do the maths and come to the right decision.
- Go for the shortest term that you can afford – The longer the period that you take the car loan over, the more money that you will pay and so when given the option, try to choose the shortest term possible best on your outgoings every single month and the salary that you receive. If you do get a shorter loan term then your payments will be higher but you will save a significant amount of money in interest payments.
- Put down a large deposit – The more money that you put down initially, the cheaper it will be to take out a car loan for the agreed term. This will help to save you money over the term of the loan and this is money best kept in your wallet or purse. If there are any dealer fees or any extra fees in there then pay them in cash and don’t consolidate them into the car loan itself.
If you follow the above three pieces of advice then there’s no reason why you shouldn’t be able to get yourself a loan with excellent terms that can be paid out over a shorter period of time. It might also be a good idea to take out some kind of insurance plan in the unlikely event that you lose your job and you are unable to make your payments.