Not all car loans are made equal. With so many loans from so many different lenders available on the market, it is difficult to know if you’re getting a good deal. Whether you’re buying your first car or looking to upgrade, here’s what you need to know ensure you get a great deal.
Sort out your credit rating.
If you have a poor credit history, not all lenders will be willing to help you out. Those that may agree to lend to you will likely offer higher interest rates and fees. If you’re in the market for a car loan, it pays to clean up your credit file before applying. Pay any overdue bills & defaults and close any unnecessary accounts and credit cards. Establishing a savings pattern and putting aside some cash for a deposit will also help you achieve the best interest rate.
Set a budget.
Work out how much you can realistically afford to repay each month and strictly stick to this budget. It can be tempting to borrow more than is comfortable and get your dream car, however this rarely ends well and can put you under financial pressure. A good broker will help you set a realistic budget and will take into account your exisiting situation and future plans.
Don’t make too many applications.
It can be tempting to submit numerous applications for a car loan to ensure you get the best deal, however this can have a negative impact on your credit rating and on the deal you secure. Numerous applications in a short period of time will lower your credit score and if you are knocked back it can then make it more difficult to gain approval with another lender. Speak with a qualified finance broker to determine the best lender before you apply, this will reduce the number of enquiries and increase your chances of approval.
Whilst submitting too many applications can hurt your chances of the best deal, it still pays to shop around and compare loan offers. If you don’t have time or it’s too tedious to compare the 100’s of different car loans available, have a broker do this for you.
It’s not all about the rate.
As a general rule, a lower rate is a best, however there are more factors that contribute to the total cost of your loan. Keep an eye out for establishment fees, account keeping fees, extra repayment fees & early termination fees. It also pays to check that each quote has the same loan term and residual. The easiest way to compare the total cost of your loan is to compare repayments. Provided the term & residual are the same and all fees are included in the repayment, you can rest assured you’re comparing apples with apples.
Call us today.
If you’re in the market for a car loan and want to ensure you’re getting the best deal, call us now on 6334 0883 (Launceston) or 6224 4402 (Hobart) or book a free appointment. We will assess your needs, compare 100’s of car loans and ensure you’re getting the best possible deal. To find out more about our car loans, click here.