Factors to Consider When Buying a Car via a Financing Deal
Posted On March 23, 2021
Many Australians with plans to buy a new car perform a thorough research about the vehicle they intend to purchase, with less focus on their financing options. Yet when doing your research, it is also important to consider, not just the purchase price but the overall costs that would impact your personal finances, especially if you plan to buy a car via a financing deal.
Still, decisions for buying a car doesn’t stop with finding the best car financing deal, as there are other expenses related to car ownership that motorists cannot avoid. Some expenses are incurred daily, while some others paid periodically, either weekly, monthly or yearly. Primary examples include fuel, insurance, repairs and maintenance as well as registration and licensing fees. Moreover, the average costs for each expense vary, usually on a per city or per region basis.
Factors to Consider When Comparing Car Loan Options
The interest rate is of primary concern of course, but while there are banks or financing institutions that offer lower rates, one’s credit history can influence the rate of interest quoted by a lender.
In order to have a vivid picture of how much a lender will provide to finance the purchase of a new vehicle, it would be wise to first fill up the National Loans online Pre-Approval form. That way,the financing experts at National Loans Australia will be able to help, in working out a loan budget that can make car-ownership more manageable for the buyer.
Compare the offers of lenders not only in terms of interest rates but also the terms and conditions governing a car loan. Lenders typically offer secured loans, where the new vehicle serves as the collateral. Yet there are lenders willing to provide those with high credit scores with an unsecured financing facility. This denotes giving the buyer a clean title to the ownership of the new car. .
Is the interest rate fixed or variable? This is also an important point of comparison in case you have plans of paying extras so you can quickly settle your car loan. A ffxed rate remains the same for the duration of a loan term, regardless of fluctuations in rates of interest.
In contrast, a variable rate follows the prevailing market rate, which means if the rate increases, so do the interest charges that will be added to your monthly repayments. Conversely, the interest charges will go down if the prevailing interest rate goes down as well. An advantage to having a variable rate on a car loan is that no pre-termination fee will be imposed in case you fully settle your car loan early.
Compare how much it will cost you to apply for a loan, which although a standard fee, tends to vary among lenders. Other fees to compare include service fee and the penalty rates for late payments.In case you have plans of making extra repayments as a way to quickly settle your car loan, find out if the lender will collect a pre-termination fee.
The aforementioned are only some of the conditions that the National Loans team will point out to you when deciding on your car loan budget. As a matter of fact, they can even help those with credit score issues, work out a car financing deal that will enable the latter to improve their credit history.