Is 1% car finance too good to be true?

November 23, 2017
Jo Duncan

Some of Brisbane’s most popular car dealerships are offering car finance at 1% comparison rate (or similar). Can this really be true? What does it mean for Brisbane West car buyers this Christmas?

While it sounds like the finance provider is offering you a low rate, the reality is that they are still getting their cut of interest at a higher rate.  They do this by factoring an interest charge into the upfront sale price of the car.

With interest included in the upfront price, the dealer may be less flexible about giving you a discount on the sale price, and may not be so generous on a trade-in value.  Plus, these sort of deals are often limited to certain vehicles for a limited time, have restrictions on finance period and balloon payment, and may not include all fees and charges, such as establishment fees.

It is a good idea to have pre-approval for car finance so that you can negotiate the best price with the dealer.  In the case of the low comparison rate offers, you may find that offering to pay cash for the vehicle results in a bigger price discount from the dealer.

 As your Mortgage Choice broker, I have access to several car finance providers and can give you a quote on a car loan, whether for dealer or private sales, and help you get pre-approval or approval for a loan.

If you would like to find out more, contact Jo at Mortgage Choice on 0412 534 805 or 

Posted in: Car loans & leasing

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