June 04, 2015
Have you been thinking about buying a new car?
If the answer is yes, you’re in luck as now is a great time to make that purchase. With the end of financial year fast approaching, most car manufacturers will have end of season run out sales, helping you to snag the car of your dreams at a great price.
Of course, before you head to your local dealership and test drive that vehicle you have had your eye on, it is important to consider how you plan to fund your vehicle purchase.
For example, are you intending to finance your vehicle through the car dealership?
If the answer is yes, it may pay to re-consider your options.
Often, eye catching offers advertised by the car dealerships, such as 0% finance, are not what they seem and can end up costing you considerably more than you had first anticipated.
While 0% finance sounds generous, the deal isn't entirely interest-free. 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 means the dealer may not be able to afford to be flexible on the price of the vehicle – or particularly generous with a trade-in offer.
Further, if you take up a 0% finance offer, it's likely you'll be obliged to have the vehicle serviced by the dealer at set intervals – otherwise you risk voiding the warranty. These service charges can be a lot more than you’d pay at an independent mechanic.
Before you sign up for car finance through your dealership, there are a few things you should do, namely:
- Look beyond the rate: Low rate loans may seem great on paper, but they could include hidden fees and charges that can really add up over time
- Consider flexible products: It may be worth finding a lender that lets you pay extra on top of your monthly repayments. Not all lenders will allow you to do this, and some of them will change you extra fees for early repayment
- Consider total costs: Make sure you consider the total cost of the loan over time, not just the monthly repayment
- Read the fine print: Make sure you read the fine print of your loan agreement so you really understand any additional fees and charges and how they will impact your total repayments.
As your local mortgage broker I can offer you much more than home loan advice. I can also help you to find a car loan that is competitively priced and right for your needs. I have access to a wide range of lenders and can negotiate a great deal for you. Remember we can also assist you in financing a range of products including motorbikes, caravans, boats and even trucks.
So why not give me a call today on 0481 317 088.