Buyers can compare cars by converting prices to estimated loan payments using an online Car Loan Calculator available at car finance broker or lender websites. Both new and second-hand Australian motor vehicle markets are extensive. New brands have been entering the market recently, providing vehicle owners with plenty of choice when the time comes to upgrade.
The big question for most buyers is ‘what car should I buy’? There are plenty of sources for suggestions on what new cars to buy and enticements from manufacturers and dealers with free extras, discount sales, promo offers and finance offers to attract buyers. The NRMA recently published its report on its assessment of the best value cars. Every month the FCAI releases the sales figures on which brands and models have sold the most that month.
Based on recent sales figures and hence the popularity of certain makes and models with buyers, the Chinese brands are dominating with 5 brands in the top 10 selling manufacturers. The data also shows that buyers are preferring EVs to petrol and diesel. Combined battery, hybrid and PHEV were over 50% of new car sales in August.
But how do buyers relate all the information available to their own circumstances? When it comes to affordability, the gauge for many buyers will be the price. Or more specifically, affordability. Where finance is required to make the purchase, the ‘affordability’ factor may depend more on loan payments each month than the ticket price.
But looking at a ticket price, most buyers will be wondering ‘what does that mean each month in loan payments?’ To assist buyers to compare cars by converting motor vehicle prices to a more relatable loan payment figure, we provide a Car Loan Calculator.
Using Loan Calculator to Compare Cars
While converting car prices to loan payments with interest calculations sounds well beyond most people’s capabilities, using our calculator could be one of the easiest steps in the whole car buying process. To convert the price of a car to more relatable monthly loan payment estimates can be done quickly and simply.
The exact price a buyer pays and the exact interest rate they may be offered will both be dependent on the final purchase deal and the lender’s assessment of their loan application. But to obtain estimates for comparison purposes, use the advertised pricing and our latest car finance interest rates for the type of loan you require. Enter a preferred term and the monthly payment estimate for those figures is displayed.
Change the loan amount to allow for a larger deposit or trade-in and see how that changes the amount due in payments each month and the reduction in interest. Making a larger deposit may make that high-spec model an affordable option.
To compare cars based on finance payments, look at the monthly outgoing and the total interest accrued. Carry out calculations for as many vehicles as you want to determine your most affordable option.
Comparing Cars with Finance Offers
Use the calculator to compare repayment estimates for different interest rates. The results are estimates as the calculator does not allow for lender fees and charges.
Buyers presented with an offer at the point of sale or comparing options from different lenders can quickly compare the offer with our latest car finance rates. If a dealer is offering a ‘promotional rate’ read the fine print to see how long the offer is valid and what rate applies after the offer expires.
Compare Cars - Extra Considerations
While price and payments are critical to many buying decisions, it can also be worth taking a few other factors into consideration regarding costs. When comparing new with used models consider servicing and maintenance. Many new vehicles come with free or relatively low-cost servicing for the initial ownership period.
If considering second-hand, you’ll want to ensure you’re not buying ‘someone else’s problems’. That is, is the buyer selling because the vehicle needs, or will soon need, significant work?
Consider which models buyers would upgrade more often. These can tend to be the higher-end brands. Is the owner selling as problems have arisen? Or do they have another reason? If buying privately, try to draw them out on their reasons for selling in conversation when inspecting the vehicle. It is highly advisable to get a mechanic to check the vehicle before buying. Organisations like the NRMA offer this type of service.
Insurance is another consideration and required when financing with secured credit. Insurance is priced on the value of the vehicle. Higher priced vehicles will typically cost more to insure. Insurers also include an assessment of repairing that model or brand when calculating premiums. Some brands are considered less expensive to repair than others.
Running costs – EVs cost more but are considered lower in fuel costs. Consider your usage – how much you use your vehicle, to assess if any fuel savings balances out the higher price tag usually associated with EVs.
Give thought to the availability of parts moving forward. Several manufacturers have already, or announced they will, exit the Australian motor vehicle market. Several models have been axed from ranges due to the new vehicle emission standards. Buyers that plan to keep a vehicle for many years will want to be assured that they will be able to access the necessary parts and labour to service the vehicle over the ownership cycle.
To compare cars based on your specific vehicle financing, connect with a Jade car finance broker online or by phone on 1300 000 003 for a quote.
DISCLAIMER: IN REGARD TO MISREPRESENTATIONS AND ERRORS CONTAINED IN THE MATERIAL AS PRESENTED, LIABILITY IS NOT ACCEPTED. THE DETAILS AND CONTENT IS PROVIDED FOR CAR BUYERS AND INDIVIDUALS AND BUSINESS SEEKING FINANCE PURELY AS GENERAL INFORMATION. THIS IS NOT PROVIDED AS THE ONLY SOURCE OF FINANCIAL INFORMATION. ANYONE THAT CONSIDERS THAT NEED FINANCIAL ADVICE ABOUT THEIR SPECIFIC REQUIREMENTS SHOULD SEEK THEIR OWN FINANCIAL ADVISOR.
