There's plenty to consider when shopping for a car loan that's right for you. Take the guesswork out of it by learning more about how car financing works.
Getting on the road needn't be a complex exercise, particularly if you have your eyes on a car. Finding the right one to jump into is part of the journey, but that's often the easy part. Working out how you'll be handling car finance is often trickier, because there are so many rates and so many choices.
Fortunately, there are some tips that might help you nail your car loan and secure that car faster.
1. Keep your loan term as short as possible
Choosing a shorter loan term means paying more each month, but you’ll pay off your car faster. The sooner you can repay a loan, the less interest you’ll pay. Just make sure it works with your budget.
2. Be aware of your credit score and report
Consider checking your credit score before applying for car finance. Once you know and understand your credit score, you’ll have a better idea of the interest rates you may qualify for.
3. Look for lenders charging minimal fees
Expect most car loans to have one or two fees as standard. But it’s still important to ask the lender about all of the fees associated with a loan you may be interested in.
4. Consider loans with flexible features
Car loans can differ considerably in terms of what they offer. Some more popular features include free extra repayments, redraw facilities and repayment schedule options.
5. Pay attention to the comparison rate
It’s important to opt for a car loan with a competitive interest rate. But remember, only the comparison rate incorporates fees and charges, unlike the advertised rate.
6. Compare car loans from multiple lenders
It pays to compare. By shopping around, you can potentially save hundreds if not thousands of dollars over the life of your loan. To discover some of Australia’s most competitive car loans, keep scrolling.