You know that feeling you get when the car of your dreams zooms past you, and you have that moment when you think to yourself, “how on earth did they afford that car?!” Typically, the answer to that question is car finance, something the majority of drivers you see driving new cars have. Even many driving older cars will have car finance. When buying a car it allows you to drive a newer car for a fraction of the price and simply pay it off monthly. At eCarz we are committed to helping our customers and clients to get behind the wheel of the car of their dreams sooner, and with less hassle. We can help you with car finance on a new or used vehicle and get you a rate that is going to fit in with your financial plans without crippling you. Read on to learn everything you need to know about financing a car with us.
Everything You Need to Know About Car Loans
The first thing many of our customers say to us is “I don’t know where to start!” When it comes to financing a car there are many things to consider and review before making a decision. Here at eCarz, the last thing we want is for you to overspend.
Securing a lower interest rate and knowing where to borrow from can save you hundreds or even thousands of dollars over the life of the loan. That’s why our dedicated team want to share the ins and outs of how to get the best bang for your buck.
Let’s take a closer look at some of the things you should consider when financing a car.
Car Loan Basics
A car loan can either be secured – that is, attached to the vehicle you are buying as security for the loan – or unsecured, which means that there is no security for the loan.
A secured loan will generally attract a lower interest rate because the risk for the bank or lender is lower. If you do not make the repayments on the vehicle, the bank retains the title to the car and can repossess the vehicle and sell it to reclaim their loaned amount.
An unsecured loan may have a higher interest rate attached to it, but the vehicle will be owned by you outright, and the loan is a personal loan which means that you merely make payments and pay interest on the sum lent to you.
Used vs. New Car Finance
Finance options are many and varied depending on what you are purchasing. New car finance is often easier and more affordable. Used car finance is different depending on car make and year.
Why You Need New Car Finance
Maybe you need a newer car as it is safer, more fuel efficient, better driving, and will allow you to resell at a higher price. You may have a job but not have the $20,000+ in case that a new car will cost.
Maybe your car is ready for the junkyard or no longer financially viable. There are many reasons for needing a new car and not having the funds.
How to apply for car finance
Anyone with a job or source of income is eligible for car loans of some variety. If your credit rating is good, then you have a range of options available. This will allow you to find the most competitive offer. And look, even if your credit rating is not that good, there are still many ways to get a loan. So to keep things simple, we’re going to share with you the most popular.
Lenders
A bank will lend you money for practically anything, so long as you can prove you’re able to pay it back. For car repayments, the loan is secured. This means should you fail to repay it, the bank can just take your car and resell it and charge you any difference.
Banks offer the convenience of being able to loan, making car repayments simple and easy. The rates banks offer for car loans vary. Some can be very competitive, some can be the opposite. When deciding to get finance, shopping around is your best bet.
Private Lenders
These are private companies who offer loans. Royal automobile club of each state, building societies, and other private lenders also offer finance. Depending on your membership or association, this may or may not suit you. It’s also important to consider how competitive their deals and terms are.
A broker has access to the best of both worlds and more. They will offer a range of services sometimes they can assist in finding who will lend you the money and sometimes they can help you get lower repayments or more competitive interest. A broker is a little like Google, It will take all of your details and give you the best options in your search that meet all your requirements.
If you’re a student, work part-time, casually, own a business or don’t have a job or a stable income, sometimes a broker can help you get a loan.
Car Dealers
Car dealers always offer finance, in-fact it’s a selling point. When you see those signs, “drive away no more to pay”, that’s what they mean! They aren’t giving you a car for free, they are selling finance and offering you the chance to get that shiny new car now.
It makes sense for car dealers to offer finance and sometimes they will be quite competitive. It’s always a good idea to see what they offer. They may even trade in your old car for a higher price to try to make you want to purchase that car today.
At eCarz we’re not exclusive to those who want to buy or sell a car in Brisbane only. We’re a car broker that offers this service Australia wide. Not only this. We also offer caravan finance, truck finance and equipment & machinery finance.
Best of all, We can cater to any circumstance. With a network of over 40 lenders we can offer very competitive rates and deals. So it’s possible to make that new car a reality by either popping in or contacting us online or by phone. We aim to make car finance easy.
Regardless of who you decide to finance your car through, these are important things to know.
Interest Rates
What is your interest rate; is it fixed or variable? Are you allowed to pay off your car sooner? Is your car locked into a set monthly repayment? Can you direct debit these payments? Will they change due to interest rates? All of these are important to knows.
Don’t be fooled by car dealers offering 0% to 2% finance – it is most likely a trap. When a dealer offers a low finance price, they often increase the overall price of the car in order to pay for the low finance. This can leave the buyer paying even more over the long run.
Fees
You’ll want to review what fees are associated with the loan? Are there any set up or exit fees? Does it have late repayment fees? Will you be penalised if you are late? What liability do you have? These are all things to think about before you sign that contract.
You’ll also want to know what the conditions of your car loan are? Will you be paying it off for the next four years at the same rate? Might interest changes affect you?
It pays to seek out all the offers as everyone wants to sell you their car and sometimes the incentives are worth it. One dealership offered free petrol for a year, another free servicing, so it’s smart to look around.
Insurance
If you take any loan, especially a car loan, it’s important you insure your car for the value. Market rate isn’t always enough, so try to find insurance that offers either agreed or new for old replacement.
This ensures if you accidentally write your car off or someone who is uninsured does, you won’t be stuck paying your car loan and have no car.
Shop around, find the best repayments for your loan and make sure they offer you things that you would need in the event of an accident.
Some car insurance deals may even cover your repayments in the event of an accident. It is important and necessary to insure any car but especially one that you are paying off, regardless of how you are doing it.
Knowledge is Power!
Now you are more knowledgeable re car financing, you can confidently discuss the term of finance with any car dealer or bank or private lending company and know what you’re getting yourself into. So now you can grab the best bang for your buck and take home the ride you’ve always dreamed of. At eCarz we can offer you a range of financing options and secure you a great rate on a new or used car finance product. Why not give us a call and have a chat to our friendly team to find out about how we can help to get you behind the wheel sooner?
Who knows, next time it could be you driving past, with someone staring at you wondering, “how did they afford that car!?”
Updated: Thursday, 9 January 2020