Everyone has a budget when setting out to buy a new car. A budget expectation or target for both the purchase price of the car and for the car loan. Whether it’s a top of the range figure, a figure that works with the business cash flow or the lowest possible amount so weekly or household expenses are not compromised, buyers aim to achieve their target. Regardless of the range of budgets, there is sure to be one issue that all buyers would be seeking – to save money on their car loan. No-one wants to pay more than they have to!
Saving money on the car loan can ease cash flow pressures for business buyers and allow private buyers more money to purchase other goods and meet their monthly household budgets. Saving money on your car loan is achievable by paying close attention to a number of aspects when sourcing motor vehicle finance.
The interest charged on finance is the largest cost of a car loan. That is in the cost or charge of borrowing to purchase a vehicle as opposed of course to the amount being borrowed. So getting the cheapest interest rate is key to saving money.
Locking in a fixed rate loan while interest rates are at their current low levels can ensure you save money. Buying now while rates are still low can also save money compared with delaying the purchase to a future time when rates could be higher. The RBA Board is due to meet in a few weeks and some analysts are predicting a rate rise sooner than the RBA’s 2024 expectations.
Interest rates on car loans and motor vehicle finance will vary depending on the lender. While the motor vehicle finance sector is highly competitive, the rates still vary as do the ways lenders will assess loan applications.
Business buyers will note that the interest rates on business finance products do vary. Opting for the lower rate finance type can save money but all features and benefits of a loan product should be considered in the context of the business’ objectives.
A key step is to compare the different interest rates and types of car loans being offered by different lenders. Not every bank and finance company has the identical loan structure. Yes, the majority of loans for private new vehicles will be a Secured Car Loan and follow the standard format. But some may be at a fixed rate and some at a variable rate. Fees and charges will vary as will some of the loan conditions such as term permitted, application criteria and other aspects.
Private buyers can refer to our Compare Interest Rates calculator to see the rates and loan types currently offered by a number of lenders.
Consider the Loan Term
The loan term also comes into play when buyers are looking to save money on their car loan. A longer loan term results in lower repayments but can mean you are paying more money in total when interest is factored in.
Buyers need to decide if lower repayments or a lower overall cost is their priority. Some lenders will have a say in how many years a loan will be approved for. Loan applicants don’t always get what they want but our Jade Car Loans consultants negotiate hard on behalf of our customers to achieve the best outcome.
Use our calculators to see how varying the loan term varies the repayments and the overall cost of a loan.
Deposit or no deposit?
Obviously the amount requested for the loan will be pivotal to what the car loan will cost. Jade offers no deposit car loans to approved applicants and this means that the entire purchase price of the car can be included in the loan. This is subject to lender approval and the age, condition and price of the vehicle will be considered, especially with used vehicles.
The quandary for those looking to save money on their car loan might be – will they take advantage of a low interest rate car loan now and borrow 100% of the car price? Or, should they save money on the overall cost of the loan by using part of their savings to pay a deposit on the car?
Paying a deposit to the dealer/seller will reduce the amount required for the car loan which will flow on to reducing the total amount of interest payable over the full term of the loan. Thus saving money in the long term.
This is a personal decision and may be dependent on what other purposes those ‘savings’ can be used for in the future.
Loan applicants might wish to discuss these issues with their financial advisor prior to applying for a car loan. As a broker-style lender, it is not the role of your Jade Car Loans consultant to advise our customers on personal financial objectives. Our role is to source, negotiate and structure the cheapest car loan.
Attend to Your Credit Rating
Lenders will assess an applicant’s credit rating when forming an offer for a car loan, including car loans for business. The better the credit rating, typically, the lower the interest rate achievable. That means a saving. Reviewing your credit score and profile prior to making an application is a sensible step towards saving money on a car loan.
Address any issues by correcting errors as per the advice on MoneySmart.
Assistance to Save You Money
Jade Car Loans provides an expert and comprehensive service to assist car buyers to save money on their car loan. With our expertise, resources, and vast lender accreditations, we have the capabilities to source customers the cheapest car loan available, including low doc car loans. Saving money on interest rates and on the total cost of the loan.
Both business vehicle buyers and private car buyers are welcome to utilise our services to ensure they secure a car loan which meets their budget and saves them money.
To discuss how we can assist you to save money on your car loan, contact Jade Car Loans on 1300 000 003
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.