Australia’s appetite for new and used vehicles is at a high, as we take to the roads to travel locally and avoid public transport this year thanks to COVID-19 restrictions and border closures.
According to the latest FCIA data, new vehicle sales reached historic levels in April after six consecutive months of growth. This comes despite widespread new car delivery delays of up to six months or more for some Aussie consumers off the back of factory shutdowns and component shortages worldwide.
The used car market is also experiencing a boom, with wholesale used-vehicle prices 37 per cent higher in March 2021 than pre-pandemic February 2020. This is also being influenced by delays across new vehicle deliveries.
As our desire for a new set of wheels grows, Aussies looking to drive away in a new or used vehicle may be wondering what they can do to nab a competitive car loan rate.
Here are RateCity’s tips for improving your chances of getting your best car loan:
- Be prepared
Before you visit a car dealership, you’ll want to ensure you’ve prepared your finances and ensured you’re in the best place financially to apply for a car loan. This is because lender’s will assess your personal finances to ensure you can not only service the loan, but you showcase a level of creditworthiness that means you’re unlikely to miss repayments or default on the loan.
This means you’ll want to check your credit score before taking out a car loan. Borrowers with ‘Excellent’ credit scores are more likely to be approved for the most competitive car loans a lender can offer. If your credit score does not fall into this category, consider boosting it before you apply.
- Pay down your debts
Speaking of presenting yourself as being in the most ideal place financially to service a loan, you may also want to consider getting on top of your outstanding debts before applying for a car loan. This includes considering paying off credit card debts and other personal loans that you feel may be adding to your ongoing expenses.
Car loan lenders will look at your income and expenses, as well as recent bank statements, to paint a picture of how much you can afford to service in a loan. If a huge chunk of your income is going towards multiple other debts, the lender may not approve you for the loan amount you need.
- Don't feel pressure to commit
If you’ve ever been to a car dealership, you’ll know how pushy dealers can be about trying to get you to sign up to their loan financing service. Before you begin looking for a car loan, hop online and do your own research. It should only take a few minutes, and by being armed with alternative car loan rates you may qualify for, you’ll feel less pressure to commit at the dealership.
Plus, if you come to a dealership with a range of car loan rates from a comparison table, the dealership may be able to negotiate with you an even lower rate or lower fee offering. Doing your own research and shopping around is one of the easiest ways to ensure you’re getting the best car loan on the market for your financial situation and needs.
Thankfully, RateCity has done the hard work of researching the most competitive car loans for you. This is where RateCity’s leaderboards. Come in. Our leaderboards rank some of the most competitive car loans in the marketplace with our Real Time RatingsTM system.
Unlike other rating systems that grade their products once or twice a year, Real Time RatingsTM results are calculated in real time. This means you get the most up-to-date rating for your comparison. Each car loan is given a score out of five stars, based on loan costs and flexibility.
(Rankings are correct at the time of publishing. Please note lenders may trade places on the list as interest rates and fees change and RateCity’s tracker reflects these movements.)
RateCity's top rated new car loans
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