September 21, 2018

How to Get a Car Loan that’s Cheaper than Dealer Finance

Buying a car is a significant decision as it will affect your financial situation. Whether it’s for work or business or for family use, new or secondhand, the key is to determine your repayment options and if you can afford it.

You can get a car loan or dealer finance. In some cases, a car loan is a better choice. Unlike dealer finance, a car loan offers more options and flexibility. If you cannot keep up with repayments, the bank can adjust your loan term. Also, there are banks that allow early repayments without fees. How can you get a car loan that’s cheaper than dealer finance? Here are some things to consider:

Compare car loans

Know what’s available and check what meets your requirements and financial situation. There are several financial institutions and unions that offer a range of car loans. Make sure to know their offerings so you can have a well-informed decision.

Check the interest rates

The interest rate plays a significant role in either car loan or dealer finance as it affects the amount of your repayments. In general, dealer finance offers lower car loan rates but this doesn’t necessarily mean better deals. Interest rate is an important component but there are other factors to take into account. That is why it is important to check the rates of both options to get the best deal for you.

Know how much you need to pay regularly

You can determine the amount of repayments using a car loan repayment calculator. Bear in mind, however, that it will only give you estimates. There are many factors involved when buying a car, so use a car loan repayment calculator only as a guide.

Be wary of extras

The actual amount should not be affected by extras such as extended warranty. The same goes for other charges that may come with the car loan. Make sure to ask about the extras so there are no unpleasant surprises later on.

Car loan and dealer finance are two common options when buying a car. Each has its own benefits and disadvantages. What’s important is to weigh these pros and cons to see which offers a better deal based on your requirements and preferences. Should you choose a car loan, keep these tips in mind so you can buy your car with terms that are in your favor.

Got other ideas on car loan rates and how to compare car loans? Share your tips in the comments section.

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How to Tell if a Car is Fuel-efficient before You Buy

Many Australians opt to buy a new vehicle, whether for business or work or family needs. There are so many models to choose from and a lot of things to take into account. This makes the car selection process a bit time-consuming, not to mention the car loan rates which are also important when buying a new car.

One of the main considerations when buying a new car is its fuel efficiency. It refers to the distance that you can travel on a certain amount of fuel. This feature of a new car means that the further you can drive every 100 kilometres, for instance, the more money you will save on petrol. Not only is it relevant in reducing the impact to the environment through lower greenhouse gas emissions and air pollution, it signals significant savings in the long run. But how can you tell if a car is fuel-efficient before you buy?

Fuel Consumption Label

Cars, four-wheel drives, as well as light commercial vehicles available in Australia should display a Fuel Consumption Label which indicates the running costs and emissions performance of the vehicle. You will see figures that show the number of litres of fuel needed to drive 100 kilometres, as well as emissions of carbon dioxide (in grams) per kilometer. Bear in mind that the lower the figures are, the better.

However, for cars which were manufactured from 2004 onwards, you can check their fuel efficiency information at the GreenVehicleGuide. If you’re looking at cars which were made between 1986 and 2003, you can check the fuel consumption guide database.

Petrol vs. Diesel

While petrol is the preferred fuel choice in Australia, diesel is getting more and more popular. In general, engines running on diesel are more fuel-efficient since they use compression ignition that leads to a more efficient fuel-burn.

Compare car models

It pays to do a lot of research to know which vehicles are fuel-efficient and suitable for your needs and preferences. You can check the websites of car manufacturers as well as comparison sites so you can compare their offerings and come up with a more informed decision.

While checking car models, you may also want to compare car loans. Both are essential components when it comes to buying a new car. You can check car loan rates and even use a car loan calculator so you will have an idea on how much money you will need for repayments.

Got other ideas on fuel efficiency, car loan rates, and how to compare loans? Share your tips in the comments section.

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Green Vehicle Guide in Australia

In recent years, we’ve been hearing news of establishing policies that will help reduce the impact of climate change. Support from numerous governments is needed to achieve this goal but as citizens, we can also contribute to this initiative. In fact, we can do this in a lot of ways, and one of them is to choose an environment-friendly vehicle.

What makes a vehicle environment-friendly? In general, a car or vehicle can be considered environment-friendly if it has a low impact on the environment. How would you know if your vehicle is environment-friendly? This is where the Green Vehicle Guide in Australia comes in. In a nutshell, it provides details on how light vehicles sold in the country perform in terms of reducing its impact to the environment. These details include the greenhouse rating based on carbon dioxide emissions, air pollution rating based on emission standards, and fuel consumption.

Are these details from the Green Vehicle Guide reliable? Yes, the information is given out by authorised representatives of vehicle manufacturers. It comes from the certified data that is necessary for labelling standards on emissions and fuel consumption. Data is then cross-checked and audited by the department.

Planning to buy an environment-friendly vehicle? Here are some things to consider:

  • Check the Green Vehicle Guide. With essential information on carbon dioxide and fuel consumption, it will greatly help you identify the model of the vehicle that has the lowest possible impact to the environment.
  • Compare car loans. Banks and other financial institutions vary in terms of the car loans that they’re offering. To get the best deal, make sure to check their car loan rates. You can likewise use a car loan comparison online and/or seek professional advice.
  • Use a car loan calculator. Car loan comparison will be easier if you use a car loan calculator. This gives you an idea of the amount of monthly payments that you need to pay. Take note, however, that a car loan calculator can only give an estimate. You may use it as reference so you can adjust your regular budget.

If you’re serious about buying a green vehicle, consider checking the details provided by the Green Vehicle Guide. By buying an environment-friendly car, you will be able to do your share in reducing the impact of climate change.

Do you know other things about the green vehicle guide and car loan comparison that are worth considering? Share your insights in the comment section.

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What is a Chattel Mortgage when Talking about Car Loans

If you’re a business owner in Australia and you are looking around for a great car loan deal, you may have come across the term chattel mortgage. What is it? What makes it different from a typical consumer loan?

A chattel mortgage is a commercial car finance product wherein a finance company lets you borrow money to buy a car or vehicle (chattel) that will be used mainly for business, and you’ll make regular payments on the loan (mortgage). It differs from a consumer loan in the sense that the finance company secures the loan with the vehicle that you want to buy. Once you’ve fully paid the loan, you can take ownership and have a clear title of the vehicle and the mortgage will be removed.

A chattel mortgage comes with several benefits. It offers flexible contract terms, lower interest rates compared to consumer loans, fixed monthly repayments, and tax deduction. A residual balloon payment can also be applied so you can have lower monthly repayments.

There are different finance companies that offer chattel mortgage and car loans. Consider these tips to get the best deal:

  • Do your research and compare car loans. With so many things to consider, it is best to look around and see what your options are. Check the car loan rates and other features so you will have an idea of what meets your requirements and financial situation.
  • Use a chattel mortgage or car loan calculator. This gives you an estimate of the amount of your monthly repayments together with the interest. This is a helpful tool for car loan comparison as it gives you an estimate of how much you need to pay based on your preferred term.
  • Seek financial advice. A financial professional can help you better understand the terms related to car loans. It also has taxation implications. Cash basis taxpayers may claim all GST input tax credit up to the depreciation limit related to the purchase of a vehicle under a chattel mortgage facility. On the other hand, monthly repayments or residual amount is not subject to GST.

Do you have other tips on chattel mortgage and car loan comparison in Australia? Share your insights in the comments section below.

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Getting “Cheap” Car Dealer Finance means Paying More?

There has been an influx of car dealerships offering low interest or zero percent interest to finance a new vehicle, this looks great on the surface, and it will easily gain the attention of a lot of customers in Australia, but is it really a good deal?

Disadvantages

If car dealerships are charging no or very little interest on their finance deals, they have to make a profit elsewhere which means that you will end up paying much more for your vehicle in the long run. Here are some of the ways a car dealership will make a profit outside of the interest rate:

  • Price: On a zero percent finance deal, you will pay the full retail price. If you were paying for the car in cash, you would be able to negotiate for a lower price.
  • Trade in Value: If you are trading in your old vehicle at the same time as getting zero percent interest on a new car, you will get a lower trading price than its actual value.

How can I avoid paying more?

There is only one way to avoid falling victim to unscrupulous car dealerships and that is to do your homework. Whether you are trading in your old car or purchasing a brand new one, before you walk into a car dealership, make sure that you are certain about the value of the car that you intend on trading in as well as the value of the car you will be purchasing.

You can also use a car loan calculator to work out how much your car loan rates will be. This will provide you with a clear idea of the cost of a typical finance arrangement.

You should also spend some time making car loan comparisons, don’t go with the first deal that sounds appealing because there might be something better for you.

Final Thought

Zero percent car finance deals are generally for those who have a low monthly spending budget. It means that you will pay more over the life of the loan but it suits your monthly outgoings by not having to pay any interest. If this sounds like you, before making a decision to take out a zero percent car finance loan from a dealership, make sure you have taken all available factors into account and conducted the proper research before making a financial commitment.

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