End of year run outs; Who pockets the savings?

June 16, 2014
Steve Pratt

I was talking to my neighbour yesterday and with child number 3 almost on their doorstep, he has taken advantage of the end of year run out to upgrade his car. He told me about the price difference between walk-in and internet sales.

After leaving the dealership, he found the exact same car on-line $8,000 cheaper than if he had bought it at the dealer.

Right now, you may be able to get a great bargain as car dealers heavily discount their prices before the June 30 close.

These savings could be lost if you don’t do your research.

It is the same with dealer finance.

Whilst it may seem attractive and convenient to get the car and finance all in the one place, are you really getting a good rate?

The truth is that car dealers receive a large percentage of their income from financing the deal. What they don’t get in the purchase price, they can recover in the financing through commissions and other optional extras. These costs could mean that the savings you made on the purchase price are eaten up by paying thousands of dollars extra for your finance..

 At Mortgage Choice we consider buying a vehicle an important decision, and getting the right finance method is an important part of the process.

 Before signing those documents ask the dealer these quick simple questions.

  • Does the rate provided include all the fees and charges associated with the purchase?
  • What are your repayments?
  • Are the fees included in your monthly repayments?
  • Does the finance amount include any options or extras that you have purchased?
  • What are the break fees for the loan should you wish to pay it out early?
  • Can the dealer show you these details in the contract?

If you are still unsure, ask for a written quote or copy of the contract to consider. If the dealer wont provide a written quote are you really getting what you think?

As your local Mortgage Choice broker, I don’t sell you cars, so why let your car dealer arrange your finance? I do however access to a range of lenders and will get an understanding of your circumstances and financial position, to help you find a loan that's right for you.

 Arrange you car finance now, new or used.

Call Steve on 0427 390 929.

Posted in: Car loans & leasing

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