In the current climate of rising prices, rates and inflation putting pressure on the budget and the business bottom line, increased diligence with major purchases may be required. When a new car or business vehicle is still on the must-have list, a key priority will be cheaper car finance. Any savings or reductions achieved in rates and repayments may be the difference between the car purchase becoming a reality or being consigned to the back burner.
Sounds logical and sensible. But how do you make it possible? How can cheaper vehicle finance be achieved in the current economic environment?
New car buyers can consider a number of actions in order to achieve cheaper car finance even as interest rates rises and inflation forces prices up. The approach adopted may vary depending on individual requirements but may be worth considering to ensure the car loan repayments are cheaper and that can mean, affordable.
Price and Cost Pressures to Consider
Understanding where the current cost pressures are emanating may provide background and assist in planning the car finance. Inflation sits at 5.1% with expectations from the RBA that it will rise to 7% before we see the end of 2022. This is placing upward pressure on prices for many goods and services which then puts pressure on household and business budgets.
Inflationary pressures are being attributed to a combination and range of both global and domestic factors including supply issues, constraints on business to achieve capacity, increased demand and ongoing issues being caused by the COVID-19 pandemic in some countries.
To address rising inflation and return it to levels around 2% to 3%, the RBA is moving to raise the cash rate. As part of monetary policy rising the central rate is a measure utilised by central banks to curb spending and arrest spiralling inflation.
Interest rates have risen significantly in the past 3 months with the RBA lifting the cash rate from that historic low of 0.1% to 1.35% as of the Board’s July meeting. This has increased many home mortgage payments in particular.
Business owners and operators are facing additional cost pressures from a number of fronts. Rises in the minimum wage, increase in the superannuation guarantee and the upcoming expiration of the fuel tax pause just a few to mention.
For those with existing car finance and feeling budget pressures, reaching out for assistance from your lender or speaking with a financial advisor may be advisable.
Cheaper Motor Vehicle Finance – Lender Market
A key step in securing cheaper car finance is rethinking lender choices. Not all car loans are created equal so to speak. At least not in regard to the interest rate and suitability to the specific requirements of individuals and businesses.
Interest rates vary across the motor vehicle finance lending market as banks, finance companies, dealers and manufacturers use their own individual guidelines to set their rates. Yes, there may be some that are the same and the variations in some instances may only be slight. But while a small rate variation may appear small when expressed as an interest rate, a different scenario emerges in relation to total interest payable on the car loan.
By using a commercial car finance calculator and working up repayment estimates at varying interest rates, you’ll see the difference. Calculate that one repayment amount over the full selected loan term and that figure with loan amount deducted, provides an indication of total interest payable.
Another factor to appreciate is that the cheapest rates advertised apply to loan applicants with good credit scores. So the process for getting cheaper car finance is to be in a position to scour a vast cross-section of the market to find the cheapest rates, apply to those lenders to see exactly what rate and loan conditions will apply for your specific application.
A very time-consuming process for individuals. The faster and more accurate option is to use a finance broker such as Jade Car Loans.
How can a broker such as Jade Car Loans achieve cheaper car loan rates?
We have accreditation with a large selection of motor vehicle finance lenders that offer both private vehicle and business vehicle loans. This entitles our consultants to source finance on behalf of our customers from those lenders.
Our latest data and research resources provides us with the latest information around rates and loans. Information which is typically available only to those in the industry. We also have the expert knowledge to know exactly which lenders will best suit individual customers.
Suitability can come down to loan conditions, loans on certain types of vehicles and particularly the application details. These issues can result in a higher rated loan from a less suited lender.
Our services are available for both private individuals and business operators and not restricted by the type of vehicle being purchased.
Proactive Steps to Cheaper Interest Rate Car Loans
In addition to utilise our services, buyers can take some proactive steps. Specifically ensuring that they have a good credit score. Errors on credit reports may be fixed by following the correct procedures.
Some buyers may think that buying a used car rather than a new vehicle would result in a cheaper car loan because the price is less. That may not be the case as interest rates on used cars can be higher than for brand new.
If getting lower repayments is the goal, considering reducing the amount required for the loan by buying a lower priced model or paying a larger deposit. Our consultants can also assist in achieving a target repayment by negotiating with lenders around the term of the abn holder car finance loan.
As inflation, interest rates and prices on many goods and services continue in the current upward trajectory, making the effort to consider the options available when sourcing car finance can be worthwhile.
Contact Jade Car Loans 1300 000 003 for cheaper car finance
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.