Buying a new car can be a hugely exciting prospect. But when you have the car of your dreams in your sights, there’s nothing more soul crushing than realising that it’s out of your reach because you can’t get the right finance in place for it. Destiny favours the prepared mind, and with a little planning you can secure the car of your dreams while also ensuring that you don’t break the bank with your monthly payments or waste a fortune on interest.
That’s why the first step of car buying should always be to get yourself finance ready.
Get your finance approved before walking into a dealership
We get it, shopping around for car finance is by far the least sexy and exciting part of shopping for a new car. But unless you’re lucky enough to be able to pay cash for your new vehicle, it’s potentially the most important part. Getting your finance approved before you walk into a dealership can give you more buying power while also allowing you to choose a loan product that’s right for your circumstances.
By taking your time and learning about all your options, you can make a better-informed decision. On the other hand, if you find a car that you fall in love with, you might be prone to accepting a sub-par deal on finance just so you can get your hot little hands on the wheel.
Can’t I just use the dealer’s finance?
Sure, you can. But just remember that if a deal seems too good to be true… that’s because it probably is. Remember that dealers make their money on the finance as well as the sale of the vehicle. And if you’re getting a good deal on one half of the equation, you’re probably being short changed on the other half. The house always wins!
When a dealer’s finance has an attractively low rate you probably have much less room to negotiate on the price of the car. When you have your own finance in place (or at least know your options) you will be in a better position to get a better deal.
Fixed rate or variable
A dealer probably won’t give you the option of a fixed or variable rate when they offer you finance. You’ll pretty much be stuck with whatever they offer you. When you choose your own finance product, however, you can choose between a fixed or variable rate.
Our advice, however, would be to lock that rate down.
Sure, a variable rate might help you to save on interest in the future… but is it really worth the risk? Not only do fixed rates tend to be lower but they make it much easier to pre-empt your monthly instalments and manage your finances.
Making additional payments
If possible, you should choose a finance product that allows you to make additional payments. That way if you find yourself unexpectedly flush one month you can make an extra payment on your car, paying off your debt faster and reducing the amount you spend on interest.
Being finance ready before you walk into a dealership puts you in the driver’s seat!
‘CarClarity’s mission is to save you time and money, changing the way you experience car buying, with a hassle free, safe and smarter way.
Be better prepared and approved, by simply completing an easy online application process that matches you to multiple lenders, allowing you to compare and get a better loan.’
Get your personalised car loan matches now or contact us to speak with a car loan expert.