Applying and getting approved for a car loan is not as difficult as it was before. It has become more accessible to people wanting to purchase a car as well as to those who have bad credit histories. The challenge in financing an automobile is in finding the cheapest car loans available for you in the market. In purchasing a car, you should do extensive research and know your way around the system to be able to get the best possible loan option suited for you out there.
To be able to start your search, it would be ideal to identify the common ground when it comes to car financing in Australia. Here is an idea on how much car loans cost, together with the interest rates from actual banks here in Australia.
For three different car models priced at $20,000, $28,000 and $37,000. Even with the same interest rate and loan term, the third car will already cost you more. The total interest amount that you’ll pay for the third car will be higher than the first two. Maintenance cost will also be more expensive for a high-end vehicle, thus an additional bump on your monthly bills. The higher your loan amount is, the more expensive it will be to repay.
Surcharges is another factor you should consider when computing for car financing. Such include application fees, administration fees, accounting fees and the like. Adding this all up will surprisingly give you the total amount you have to shoulder to repay a car loan. Covering these specific areas when comparing prices will save you a lot of time.
Effective Tips on How to Minimize Car Loans
Doing your research covers a few bases to be able to secure the cheapest car loan available for you out there. A timely purchase can also guarantee you with the lowest interest rates and best deals available for the current season. Here are some additional ways to guarantee the best possible and cheapest car loan you can avail to finance a car.
Zero-Interest Financing
There is no such thing as zero-interest financing. The thought of having to purchase a car, through a loan, without worrying about the additional interest you need to pay for is just a marketing strategy. Zero interest car loans are not interest-free because banks and lenders will add the supposedly interest on top of the base price of the vehicle to come up with the vehicle cost.
Not having to pay for interest is not always cost effective because in some cases, monthly charges and fees might also be included in your financing. This can be in the form of maintenance or surcharge fees that would eventually compensate with the interest you should be paying for without the zero-interest promotion. Check out for these items to be able to determine if you are indeed receiving a discount from your lender, bank or car dealership.
Add-ons are never free
Do not be deceived by add-ons. Additional features that can be added in your car purchase is not always free. Such may include tinted windows, leather seats, sealants, rust proofing and other items that eventually adds to the cost of your car purchase. You might want to add these extra features after purchasing your car and outside your car loan application. You may eventually get a cheaper price tag on these items if you purchase them outside the dealership.
Removing these items on your car purchase can also help reduce the price of the vehicle. Decide to opt out for these unnecessary add-ons.
Negotiate and Haggle
Talk to your bank, your lender or your loan specialist to be able to find additional ways on how to save and get a better deal on your car purchase. You can always walk away and find a different car dealership that will bring more value to your money. Do not hesitate to ask for discounts or to qualify for promos that the car dealership may offer.
Perfectly Time Your Purchase
Certain months and seasons open opportunities to lower fees and generous discounts on car financing. Car dealership, just like malls offers generous discounts and promotions on different months or seasons of the year on their cars. Take advantage of these to be able to avail discounts and other special promos. These seasonal promos are usually available during the Christmas season ass well as during the start of the year up until February and March.
Is Your Car Purchase Indeed Accessible?
Do you really need a high-end car, or can you settle for an older model or a second-hand one? Would it be ideal to go for a 2-seater car instead of a van if you are the only one that will use the vehicle? The accessibility of your car purchase should not only be within your means but also within your needs. Be practical and go for an average car that would provide the comfort and accessibility that you need without hurting your budget. Always remember that the more expensive your car option is, that higher your payments will be as well as your maintenance costs.
Buying a car and choosing a car loan is just the beginning of the process. The most challenging part is repaying for that loan as well as keeping up with the fuel and maintenance costs that come with using your purchased dream car.
