February – March is the traditional start to the academic year for most Australian tertiary institutions. After several years of learning from home, most 2023 students will be needing to attend classes at the uni, college, TAFE or other tertiary educational institution. For many, it means the need for their own car and consideration of car finance options.
As specialists in motor vehicle finance, Jade Car Loans has car finance options for cars for tertiary students, bought by the student or by another party. We work with tertiary students and their parents or guardians, to source a workable and viable solution to ensure the student has a reliable vehicle for their travel requirements.
Secured Car Finance Criteria
The Secured Car Loan is the most common and widely-used finance product for vehicles purchased for private use. It suits new cars and second-hand cars in good condition. The difference between finance for new versus used models should be noted as it is somewhat of a custom for a first car for a tertiary student to be a second-hand vehicle.
The vehicle becomes the security for this type of loan which is why the condition of a second-hand vehicle may be an important consideration. If the condition of a used car does meet the lender’s approval for security, an Unsecured Personal Loan may be considered.
The differences in interest rates and other loan conditions should be compared with purchasing a used vehicle compared with say a budget brand new model. Our business car finance calculator is a great tool to compare rates and other loan features.
While not related to the finance but definitely an important buying consideration can be potential ongoing maintenance and repair costs on a second-hand vehicle.
Secured car loans are consumer finance and as such subject, to the Consumer Finance Laws as regulated through ASIC. One of the key criteria to be eligible to apply for finance is being over the age of 18 years.
The application requires information to be provided on employment history, income, debts and assets and other financial information. Our lenders assess each application individually in regard to the interest rate offer and other loan conditions such as the total loan amount and loan term.
Buying a Car for a Tertiary Student
Due to the potential issues with a tertiary student applying for car finance in their name, parents or guardians make choose to buy the car with finance in their name and allow the student to operate and be responsible for the vehicle.
Comprehensive insurance is required with secured loans and the cost of this may be a consideration with under 25 year old driver.
If an arrangement is made for the student to contribute to the payments, attention should be paid to the repayments schedule being maintained. If the student is late with the payments, this will reflect on the credit profile of the person who’s name the loan has been arranged in.
Young Car Finance Applicant
Tertiary students are usually over the age of 18 and are eligible for applying for their own car finance. The employment history and credit profile will be assessed in preparing a loan offered by our lenders.
The types of issues which applicants may be presented with include:-
- Limit on the loan amount requested. This would be considered in relation to the purchase price and/or value.
- The applicant may not be seen as a good risk and as such attract a higher interest rate.
- In the worst-case scenario, the loan application may not be approved.
Applicants may improve their prospects of having their car finance approved by having another person go as guarantor for the loan.
Guarantor Option
Applicants of all ages that do not have a good enough credit profile to be approved for finance or attract the best rates can consider the guarantor option. A guarantor is a third party to a loan agreement. The guarantor is guaranteeing the loan.
Where the loan holder defaults on the repayments, the guarantor is responsible to take on the financial commitments and make the payments.
Being a guarantor is a legal responsibility and those considering the option should fully understand what is involved. Information on this credit option can be found at Moneysmart.
Sourcing Car Finance
When using Jade to source car finance, buyers are assigned their own consultant to handle the process on their behalf. For those working through the options to organise a car for a tertiary student, your consultant will assist with quotes for the different options, including car hire purchase.
We will be negotiating with lenders to get the cheapest and most workable solution for the purchase. Finance can be arranged prior to purchase to assist with ticking all the boxes before the sale has been committed.
Contact Jade Car Loans at 1300 000 003 to discuss the car finance options to provide a vehicle for a tertiary student.
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.
