The February announcement by the Reserve Bank of a further 0.25% lift in the official cash rate was likely met with disappointment by some buyers planning to purchase new vehicles with finance. The indication by the Bank that even more rises are to be expected may have added to that dismay. While we focus on achieving the cheapest interest rates on car loans at all times and for all customers, RBA decisions can have repercussions in motor vehicle finance rates.
But don’t completely cancel purchase plans before a) thinking through the options and b) speaking with us. Rethinking the way car loans are sourced and structured may be an effective approach to offsetting possible higher interest rates following RBA decisions. This approach may also be used to address increases in new model prices which are being seen with some brands.
We share our thoughts on rethinking to set buyers on the path to cheaper and more affordable car loans.
Use a Specialist Car Loans Broker
Interest rates vary across the motor vehicle finance market. Buyers intent on getting the cheapest rate will need to cover a lot of ground in order to attain sufficient quotes to be confident they have the cheapest.
Lenders will advertise their cheapest rate and by using that rate with a calculator, repayment estimates can be obtained. But these are only estimates. To get a confirmed quote and know exactly what interest rate will be offered for an individual’s purchase, contact will need to be made with the lender. This is not only a time-consuming process, it can also have a negative effect on the individual’s credit score.
Rethink the source of finance and swap out applying to multiple lenders for our broker-style lending services. We have access to more than 60 lenders to quickly source the cheapest loan offer for individual customers. We have that access to bring the lenders to you – saving you time and not impacting the credit score.
Once we pinpoint the most suitable car loans product and lender, we use our negotiating power to get the cheapest rates and process the application and assist with settlement.
Review Credit Profile
Rethink number two is to consider your own situation. The best interest rates displayed by lenders are for new cars and for applicants that have a good credit profile and rating in a good band. If you’re not sure of your current credit rating, simply request a free copy as outlined by Moneysmart and see if there are any issues which can fixed.
Fixing issues and maintaining a good repayment history on bills and other debts may improve the score and the prospects for a better interest rate.
Rethinking No Deposit Car Loans
No deposit car loans provide a valuable option for those who want to preserve their existing funds for other purposes. We offer this option to many customers across our diverse loan portfolio, allowing them to finance the entire purchase price of the car. In some cases, accessories and extras can also be included.
However, while this can be convenient, it increases the total amount borrowed compared to making a deposit to the seller. As Car Loan Interest Rates rise, the overall repayments increase proportionally.
If affordability is a priority in your car loan, reducing the loan amount by paying a deposit can help achieve lower repayments and offset the effect of interest rate increases.
Reevaluate Car Price – Loan Amount
Opting for a lower-priced car doesn't necessarily mean settling for a used model. Keep in mind that interest rates can vary for new and used vehicles, with used vehicle rates potentially being higher. Be sure to factor this in when making your decision, and utilise tools such as the Car Loan Calculator for Business use to help with your financial planning.
Explore Different Car Loan Terms
Opting for a lower-priced car doesn't necessarily mean settling for a used model. Keep in mind that interest rates can vary for new and used vehicles, with used vehicle rates potentially being higher. Be sure to factor this in when making your decision, and utilize tools such as the Car Lease Calculator to help with your financial planning. Additionally, explore options like Novated Car Leasing to better understand alternative financing solutions.
Utilize Planning Tools and Resources
To facilitate the reevaluation process, take advantage of our free resources, such as our interest rate comparison table and our Personal Car Loan Calculator. Adjusting the values input for loan amount and term demonstrates how repayment amounts change.
By taking steps to offset rising interest rates, you can still achieve affordable car loans and maintain manageable repayments. Consider Business Vehicle Loans, Zero Interest Car Finance, or exploring Unsecured Car Finance Calculators to find the best option for you.
Speak with Jade Car Loans 1300 000 003 to discuss how we can assist you offset rate rises and achieve cheaper car loans.
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.