Getting your first car, even your second is exciting. You can easily get a new car nowadays with a loan, especially with a good credit standing by your side. However, even with a steady income and stable personal finance, taking time to think before applying for a car loan is still essential. Finding the right type of finance would be a wise move before looking into car finance.
Before applying for a car loan, here are a few things you need to ask yourself:
- Is having a car indeed a necessity for you?
- How much will you need to borrow?
- Are you buying a new or a used car?
- How long do you like to pay the loan back?
Do You Need a New Car?
For some families, outgrowing their old car can sometimes be the reason for considering getting a new one, or a bigger one that can accommodate the rest of their growing family. Moving on a new home may require you to have a car to be able to go to work, something you can usually do by walking or by taking a short ride on the bus. There are plenty of reasons why Aussies require to have their own personal mode of transportation.
Having a car is a necessity, but if you can live comfortably without it, it would be better to save for purchasing one in the future rather than getting a loan to fund your purchase. If getting a car would is something you can afford to pay, through a loan, you should be able to assign an amount you intend to borrow to afford your dream car.
How Much Is A Car Worth in Australia?
To give you an idea, here are the average prices of cars in Australia. Small economy cars will cost you anywhere along the 22k bracket. The Toyota Corolla for one is at $22,990. A Hatchback Mazda 3 is at $22,490 while a Ford Fiesta Hatchback is at $22,525.
SUVs are more expensive, but has become a favorite choice on Australian roads at the moment. The Hyundai ix35 is at $32,190 and the Toyota Hilux at $48,490. You can go as expensive as $61,990 for a Toyota Land Cruiser.
With these amounts to consider, you need to think of how much you can afford and how much deposit you’ll need to have or save up to be able to purchase the car that you have in mind. To be able to determine if you can indeed afford the car that you want, with the income that you have, and the deposit that you have saved, you can use this car loan repayment calculator as a guide.
Brand New Car vs Used Car Purchases
Now you have determine how much money you can spare to buy the car you have in mind, you might want to consider getting a used car instead of a new one. To be able to guarantee that you’ll end up with the best interest rates and fees, your choice of car plays a significant role. A used car can give you the service a brand new car can but will only require you a borrow a smaller amount, compared to buying a new one through a loan.
How Long Will You Pay The Loan Back?
Car loan repayment terms usually take 5 years. However, if it is possible, you can shorten this loan term into. It would be ideal to lower your repayment term to be able to save in interest rates. The Mathematics of car loans is simple. The earlier you repay, the less interest you’ll have to worry about.
The Best Car Finance Possible for You
So what is the best car finance possible for you? Ideally, a large deposit will usually give you a low principal amount to borrow, thus a lower interest rate attached to it. Purchasing a used car, or a cheaper one lowers your loan principal. A low car loan amount, partnered with a low interest rate, paid in a shorter loan term is the best possible scenario you can try to achieve to make a car finance the best financing for you.
Intellichoice Finance helps you pull the information that you need to be able to understand how your car loan works, the fees, charges and the repayment that is required to be able to repay a successful car loan.
Intellichoice offers comprehensive guide and assistance in applying for a car loan, even with a bad credit record! You can talk to one of your car loan specialists to help you compare car loans and save you the time and money.
