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5 Things You Need To Consider When Arranging Car Financing

02 December 2013 | Article

We all want the best deal when it comes to getting a car loan; it can sometimes seem like a maze and quite a bit of information is requested, just to obtain the best quotes.

Some of the things you should consider when arranging car financing are:

Number 1 – Is The Interest Rate The Most Important?

When arranging car finance, you need to consider everything that your car loan quote involves, such as any fees and charges in addition to the interest rate.

This will change on a case by case basis, as someone who is borrowing a larger amount over a longer term, obtaining the lowest interest rate with marginally higher fees may still work in their favour, where someone borrowing a small amount over a shorter loan term, should look for the lowest fees and the interest rate would probably be lower down the list of priorities.

Number 2 – How To Compare Car Finance Quotes?

The best way to compare your car loan quotes is to compare the repayments inclusive of all fees and charges, as this will outline the overall cheapest cost to you, as this is what comes out of your pocket. If your intention was to payout your loan early, this could also weigh in on your decision making and then be considered as a cost involved with your car loan, and a slightly higher interest rate, with lower early penalty may be of more benefit to you.

Number 3 – Which Lender?

You may have found the cheapest overall car finance deal, but will you qualify with that financier? It is hard to get the overall best deal for yourself without understanding each and every lender’s policies and guidelines. Quite often a consumer may apply to many lenders, preventing themselves from obtaining the best deal for them, due to the multiple credit enquiries placed on their credit file in such a short time. This is very difficult to ascertain which lenders you may qualify for, so professional assistance can often end up being a cheaper option that not only gets you a great deal, but also protects the integrity of your credit file, and best of all, will save you a lot of time researching yourself.

Number 4 – Why Does The Car Change My Car Finance Quote?

As each and every lender assesses their interest rates differently, some important factors to consider when looking for your next car purchase would be the age of the car. Many lenders will not supply car loans to vehicles over 5 years of age, and many lenders will restrict that the vehicle must be purchased through a licenced dealer. It is a good idea to have an idea about how old the vehicle you wish to purchase will be, and how you intend on purchasing it, as this will determine which lenders the car would qualify with.

Number 5 – Credit History

It is free to obtain a copy of your credit file and it is advised to do this prior to applying for any kind of credit. If you applied for your credit file yourself, through such websites as mycreditfile.com.au, this will not create a new enquiry on your credit report, which is the best way to obtain your file. This information is any financier’s first impression of you, so it is wise to obtain your report and understand what it means.

Cale Sammons has completed his Diploma in Financial Services (Mortgage & Finance Broking) and has held multiple lender and insurance accreditations across the mortgage and automotive finance industry. He is currently a bad credit car finance specialist at BadCreditCarloan.com.au and a member of the Finance Brokers Association of Australia (FBAA) and was a previous member of the Mortgage & Finance Association of Australia (MFAA).


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