Ask Andrew - Car loans

June 10, 2016
Catriona Gillespie

Did you know that June is traditionally the best time to buy a new car?  The end of financial year pushes car dealerships to aggressively discount their stock in order to end the financial year on a high.    Coupled with the low interest rates on offer at the moment, smart buyers can get a great bargain.  Here are some tips on how to buy smart at this time of year.  

Lease or buy?

 If you’re in the market for a new car, one of the key decisions is whether to buy or lease the vehicle. There are important differences between leasing and buying a car, and it’s worth having a good idea of how each option works to make the right choice for you.

If you choose to own your vehicle, a car or personal loan remains a popular form of vehicle finance to buy your car.  Leasing means you pay for the use of the vehicle over a set term.  Some types of lease allow you to have the option of buying the car once the lease expires. 

Self-employed car loans

A wide range of vehicle finance options are available to self-employed workers. The key is to determine which one best suits your needs and business cash flow.  Car costs may be tax deductible which means that you may be able to claim part of your car's costs including loan interest, as a tax deduction. This can make your choice of car – and vehicle finance, surprisingly affordable.

The truth about 0% car finance

Offers of 0% interest on car finance may sound tempting, but it pays to read the fine print, because deals that sound that generous usually come with hidden costs. With 0% interest finance deals the finance provider still earns their cut of interest but instead of the money being spread over a series of repayments, the interest cost is factored into the upfront sales price of the car. This reduces your opportunity to negotiate on the price of the vehicle and reduces your chance of getting a good trade-in price for your old car.

For car dealers, getting buyers to walk into the showroom is a big part of the battle to secure a sale. That's where those 0% offers are so effective – they grab our attention. To create a sense of urgency they’re often marketing as being 'for a limited time only'.  However be warned that you could end up paying more for your car than if you buy without dealer finance.

That is why it is important to speak to an independent broker to see how other forms of car finance compare. It may turn out the 0% offer is right for you but at least you'll be able to enjoy the vehicle knowing you made an informed choice.

Ask Andrew today for a pre-approval

Get a pre-approval on your car finance before choosing a car whether you are purchasing through a registered dealer or a private sale. At Mortgage Choice, we have access to a wide range of lenders who provide car loans and can confidently help you find a competitive deal that’s right for you.

Once you find the car you’d like to purchase, just ‘Ask Andrew’ by completing the contact form at the top right of this page or call on 9401 9244 or 0412 498 872. I will liaise with the lender and your dealership to arrange for the funds to be drawn and payment to be made. You’re then ready to drive away in your new car!  

Posted in: Car loans & leasing

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