February 28, 2014
I’ve been in the industry for a few years now… in fact it’s getting close to a decade and I can say with some certainty that just about every client I meet to discuss a home loan says, at some point of our first meeting, “Oh, and I want a new car too”.
At the moment with historically low interest rates not only are home loans very competitive but car loans are as well. So, how do you get a car loan? Well there are three main ways:
1. From a car yard.
Many car dealerships are now offering what they call 0% car finance deals. You may be thinking “How can it be possible to purchase a car at such a low rate?” The truth is that there is no such thing as a free lunch.
The term for this low interest rate is known as a subvention agreement. This is a marketing tool developed by car dealerships, and is used to get you into the dealership and make you feel that you can afford a more expensive car. Under a subvention agreement, you may not be paying interest on the loan, however the car price is loaded so you actually end up paying more upfront than if you were buying the car without dealer finance.
Also most car yards only deal with one, or maybe two lenders, so the options are limited.
2. From a bank.
Well this is the same as a home loan. Yes banks do offer a number of car loan options but if you pop into your local branch and ask for a car loan the banker isn’t going to turn around and say “well we can do a loan for you but if you go down the road to our competition they actually offer a better product” are they?
This is the reason you use a broker in the first place.
3. From your Mortgage Choice broker!
Just like we can help you find a home loan from a big panel of lenders we can do the same with your car loan.
We have a panel of car loan lenders to choose from and just like our home loan service we can help you choose the right car loan. We will liaise with the dealer, we help you sign up the application and we can even get the car insured for you.
So, when buying a new car don’t let the emotion get the better of you. Make sure you are getting finance that suits you, not the dealer. Make sure the car is insured before you pick it up and make sure your finance is in place before you get to the yard – this will give you the best negotiating power when selecting your new purchase.
Call us today with any car finance enquiries on 9472 0211.