Securing a car loan is not as difficult as you think it is. Finding the cheapest car loans is the challenge that you should be up to for you to be able to secure the best possible option when it comes to car financing. Purchasing a car without doing research on the financing options that you can avail may prevent you from getting the best value or discounted purchase available out there.
To be able to determine the best yet cheapest car loan available for you out there, let us compare by using actual car costings and interest rates from actual banks here in Australia.
Take for example three different car models. Car A, B, and C. Car A is priced at $20,000, Car B at $28,000 and Car C at $37,000. Even with the same interest rates, the total monthly interest rate that you’ll pay for Car C will be higher than Car A and Car B. Maintaining a high-end car is also costly, so you can add it up to your monthly bills.
Interest rates also vary depending on the amount you will borrow. A higher loan amount comes with a higher interest rate at a 5-year fixed loan term.
In addition to this cost, you will still have to pay attention to other surcharges which may be included in your purchase such as application fees, administration fees, accounting fees and the like. Add this all up and you’ll be surprised with how much you can save by simply comparing these areas in the car loan financing available for you.
5 Tips on How to Minimize Your Car Loans
Doing your research allows you to make the best decisions whether in taking out a home loan or a car financing. Here are some additional ways you can do before you take out a car financing. Whether dealing with an unsecured car loan or secured loans, you can follow these tips to be able to avail the cheapest fees and charges on your car financing.
1. Be watchful with Zero-Interest Financing
It is but natural to feel a little bit excited and financially wise after seeing an attractive zero-interest loan for your car financing. Zero interest car loans are not interest-free because most lenders or bank would top of the supposed interest on the default price of the vehicle’s value. In some cases, monthly charges and fees might be included in your financing, not as a maintenance fee or a surcharge amount but to compensate for the supposed interest you should be paying for. Check out for these items to be sure that you are indeed receiving discounts from your car dealership, bank or lender.
2. Do not be deceived by add-ons
Additional features on your car purchase such as tinted windows, leather seats, paint sealants, rust proofing, and the likes usually come with additional costs. If you are offered with extras with no tangible benefit on your end or a feature that can later be added to your automobile, at a cheaper price, going for add-ons is basically inadvisable.
If it is possible to have these additional features removed from your car purchase, request to do so to be able to reduce the price tag of your automobile. You’ll be surprised with how much you can save if you’ll opt out for these unnecessary add-ons. Keep your personal loan, preferably at the minimum possible cost.
3. Negotiate and haggle
Car financing is negotiable. Talk to your bank, car dealer or your car loan specialist to look for ways on how you can save, get a better deal or if possible, decrease the price tag of your car purchase. You can walk away if you feel that you are not getting the right value for your money. Do not be afraid to ask for possible discounts or to qualify for a promo from a car dealership.
4. Timing will always be a key
Just like shopping mall sales, there are certain months and seasons within the year where car dealerships offer generous discounts and promotions on their vehicles. Take advantage of these. Most promos and special discounts are available during Christmas, the start of the year as well as February and March.
Car dealerships also sometimes offer special prices during “dry seasons” on their dealerships. Agents and car dealers work on a monthly quota basis. You’ll be able to observe a lot of discounts at the end of the month as these dealerships try to hit their sales quota. Even other financial products offer special discounts during different times of the year.
5. Access the car that you are buying
Do you really need to avail a high-end car, or can you settle with a 2-seater vehicle as your first car? Before you decide to apply, ask yourself if the car you want is the car you need and the vehicle that you can afford. It is indeed very exciting in purchasing a new car with so many great options to choose from. But to be practical and to save money, aim for a car purchase that you can afford and satisfy your needs at the same time. Buying a car through a car financing is just the beginning. The harder part comes with repaying for this purchase together with the maintenance cost and fuel costs you’ll have to shoulder once your dream car becomes yours.
You can purchase a car that suits your needs and works within your budget if you take the time to follow the tips and suggestions mentioned above. If you are still having a hard time to decide, you might want to consult with an Intellichoice loan specialist. We can help you through the process of securing the best possible and affordable car financing.
