When selecting a new vehicle, whether for private use or use in a business, one of the key buying criteria for many is safety. Car manufacturers have made significant developments in vehicle safety and are continually upgrading the safety features of their range. While the safety inclusions as listed in a brochure may sound impressive, how can buyers truly assess the effectiveness and necessity of such equipment? A question for those buying commercial vehicles and passenger cars with finance may be how a high level of safety features may affect the car loan. Will a safer-rated vehicle attract a lower interest rate and better finance?
Despite supply issues prevailing across many sectors of the new car market, many buyers will not want to compromise on safety when selecting a new car. To assist buyers in assessing a vehicle's safety rating, the ratings established by an official organisation are published – ANCAP, Australasian New Car Assessment Program.
Regarding the performance of safety features on motor vehicles, ANCAP is the leading Australian authority that undertakes testing and rating individual makes and models. ANCAP is independent and has been publishing its ratings for nearly 30 years. Many buyers have come to rely on a 5 star ANCAP rating to make a safer choice when buying a new car.
ANCAP Rating System
ANCAP uses a star rating system, 0-5, with a 5-star rating being the highest. These ratings indicate the level of safety that the vehicle provides for both occupants and pedestrians in a crash in addition to the vehicle’s ability with its technology to minimise the impacts of such an incident or avoid a crash.
When evaluating vehicles, ANCAP considers the areas of protection for separate adult and child occupants and vulnerable road users as well as safety assistance.
A model is evaluated and given its rating. But when considering a purchase, buyers are advised to look for the rating and the date stamp. This is the year that that particular rating was issued. This is important as newer versions of existing models may have ratings as per testing and ratings of an earlier version. Testing criteria may have changed since the initial assessment as may have the safety features of the model.
May 2022 ANCAP Ratings
New makes and models are presented by manufacturers for testing and rating by ANCAP. After testing, ANCAP published the results on its website. Information about ratings is readily available to the general public.
In May 2022 ANCAP published several ratings for new makes and models:-
- All variants of the Lexus NX – PHEV, hybrid and petrol, received a 5-star ANCAP safety rating. Special mention was made of the medium SUV performing well in all key areas; maximum awarded points for driver protection in testing for side impact and the front passenger in the test for frontal offset. A ‘moderate’ penalty was given on the assessment for potential impact on occupants of a colliding vehicle. Child occupant test scores were high.
- Kia EV 6, the SUV, was awarded a 5-star ANCAP rating with all variants covered by this rating. All the key assessment areas received good scores.
- C Class Mercedes-Benz sedan awarded a 5 star ANCAP rating with good scores all around.
Interested buyers can refer to the ANCAP website for details on the assessment of individual vehicles.
Impact on Car loan Interest Rates and Car Loans
Regarding motor vehicle finance, the same range of loan products, both private and business, is available regardless of the safety rating of the vehicle.
The selection of finance for new vehicles we offer comprises:-
- Secured Car Loan
- Sole trader car financing
- Car loan with ABN
- Car Hire Purchase
- Novated Lease with Salary Sacrificing
Lenders will take into account the age and condition of used vehicles when preparing a loan offer including the interest rate our consultants can negotiate. However, in general terms, with new vehicles, the safety rating of the vehicle should not have a direct impact on any loan offer made including the interest rate.
It may be worth clarifying that the widely used Secured Car Loan for private vehicles does not relate to the security assessment or safety of the vehicle. The ‘secured’ reference in this type of loan refers to the vehicle being used as security or guarantee against the loan. The lender accepts the goods being acquired as security.
Comprehensive insurance is required on all vehicles purchased with finance. The safety rating of the vehicle may be taken into account by insurers when preparing a policy offer. For example, a lower safety rating may be perceived that the vehicle could sustain more damage in a collision. Damage which may represent increased repair costs. This may increase the insurance premium offered.
So any additional cost in insurance incurred by purchasing a lower safety-rated car may be a buyer consideration.
Contact Jade Car Loans 1300 000 003 to discuss better interest rate motor vehicle 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.