One of the major issues currently affecting the new car market is availability. The shortage of computer chips along with COVID-19 issues slowing down productions in overseas manufacturing plants are the key reasons for the delays. The talk in the motor industry around the ‘old days’ of ‘walk-in and driveaway’ in a new car have gone for now. The supply issues are anticipated to normalise to some extent by next year. Variations will occur across different brands. So buyers face the prospect of pre-ordering and waiting months or longer. So questions are arising around pre-approved loans and car availability. To assist buyers we answer questions around what happens with pre-approved car loans with delays in taking delivery of the vehicle.
We present this general response in an FAQ format for quick perusal. This is general information and more specific answers regarding your specific loan can be obtained by speaking with a Jade Car Loans consultant.
What is a pre-approved car loan?
A pre-approved loan is a loan where the application is processed through to the stage of ‘approved’ before an actual car purchase has been committed to. The alternative being – select the car, do the deal with the dealer, pay a deposit and then head off to source finance. At the pre-approved stage the exact loan amount may not be known. Applicants can request loan approval for a dollar amount with or without a particular vehicle in mind.
Is the criteria the same for pre-approved loan applications?
Yes. All loans applications follow the same eligibility and criteria. Loans for private vehicles are consumer finance and regulations as set out by ASIC need to be adhered to by responsible lenders.
Is the interest rate the same?
Yes. The quote for a pre-approved loan or a ‘post-purchase’ loan will be priced at the business car loan interest rate which is current at the time of application.
Can cheap car loans be obtained with pre-approved finance?
Definitely. Jade Car Loans go through the same sourcing and negotiating processes for all loans. That includes sourcing the cheapest option and negotiating as far as possible on terms and conditions.
What loans is pre-approval available for?
Pre-approved motor vehicle finance is available across our full portfolio of personal car loans and business vehicle finance.
- Secured Car Loan
- Car Sole Trader loan
- Lease
- Commercial Hire Purchase
- Novated Car Leasing with Salary Sacrificing
What obligation is attached to pre-approved motor vehicle finance?
There is no obligation to proceed when requesting a pre-approved loan. If you change your mind and do not proceed with the purchase, the loan offer simply expires.
How long does the approval last?
Pre-approved loan offers are valid for a certain amount of time which will be advised at the time. The validity period may vary across our lenders. For specific details prior to make an application, please contact our team.
What happens after the pre-approved loan expires?
When the period of the pre-approved loan as designated by the lender expires, that loan offer is essential no longer valid.
When the car is available for delivery, what do I need to do?
The actions required when the vehicle is finally available will depend on the time which has elapsed since the pre-approved loan offer was made. If it is after the expiry date, your Jade consultant will source a new quote for you. If the details required for the application including your financial position remain constant, the application process should be able to be expedited.
If delivery timing is within the valid period of the pre-approved loan, simply contact your Jade consultant to finalise the loan and liaise with the dealer for settlement.
Will I get the same interest rate months down the track when the car is available?
If the pre-approved loan expires and a new loan quote is required, the interest rate current at the time of quoting would apply. If the RBA moves to increase the official cash rate in 2022, banks and lenders will usual respond for increasing lending rates.
To ensure you are eligible for the cheapest interest rate loan, ensure you keep your credit profile in good order. Regardless of the interest rate market, Jade always works to achieve better interest rates for all our customers.
What are the advantages of getting a pre-approved loan now when the car is not available for months?
While a pre-approved loan may time out before the vehicle is available for delivery, there are still advantages to be realised. A pre-approved loan provides a level of certainty around affordability. Buyers usually have a price range for their new car but may not know how that price converts to loan repayments. A pre-approved loan can provide that certainty.
Know you have been approved may also place you in a position to pay a deposit to secure the vehicle on the next shipment. Often dealers may lock in orders at currently advertised prices so savings on the vehicle price may be realised.
For those that are unsure of their credit rating, applying for a pre-approved loan provides clarity over how much you would be approved to borrow and what the repayments will be.
Why not just use a car loan calculator to get a loan estimate for pre-ordering purposes?
Our business Car Loan Calculators are great for obtaining rough repayment estimates on loan amounts and for forming ideas around how you want your loan structured. But, calculators are a generic device and do not have the functionality to cater for the nuances of individual loan applications. The results obtained from a calculator may vary from those in a loan quote.
Hopefully this information has been of assistance to you and we invite you to contact us to discuss pre-approved car finance.
For pre-approved motor vehicle finance call Jade Car Loans on 1300 000 003 or apply online
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.
