Buying a car is a big decision. You want something reliable, low milage and in good condition… Or maybe something brand new, sleek and stylish is more to your taste? Either way, the cost of a vehicle is massive – yet sometimes second rate just won’t do.
It’s a dilemma that many face, yet we have the quick and easy solution to get you back in the drivers seat- car financing.
So how does car financing work?
It’s easy – you come to us with your desired loan amount, and we discuss a repayment schedule that would suit you. Our role is then to search for the loan that best fits your needs. Once approved, the money is lent to you and you can then start looking for a car. Because you have “cash in the hand”, you have a wide range of possibilities (i.e. online, auctions) and the ability to negotiate, unlike if you were receiving financing through the car seller.
If you choose to use car financing to cover the cost of your next vehicle purchase, there are certain factors you need to be aware of:
- If you default on payments, then the car is used as collateral, and will be seized to cover the payments.
- You must have insurance on the car at least to the value of the loan.
- While up to 100% of the cars value can be covered, make sure that it is a realistic amount, especially when you add interest on top. How long will it take you to pay it off?
- If you buy the car new, it depreciates rapidly within the first year, so selling it may not cover the loan amount!
- It can be a good idea to consider a car that is a couple years old – that way its decreasing value is generally at a lesser rate.
- A few other T&C’s depending on the provider.
Sounds reasonable… So how do I qualify?
Most lenders have two main requirements:
- You have your restricted or full license.
- You are over 18
Some lenders (usually the more responsible lenders) such as the AA will have a third requirement:
- A minimum deposit of $5,000. While this is variable depending on the lender, consider this- if you are loaning 100% or don’t have a $5,000 deposit how affordable is the loan?
Be aware that some companies that offer these loans are less reputable – will the interest they charge be sky high?
Talk to us about a car loan now on 0800 000 774.