The RBA increased the cash rate from 0.1% to 0.35% at its May Board meeting. The rise in the cash rate will now have a flow-on effect through to increases in lending rates across the markets including motor vehicle finance. Interest rates had been at historic low levels since November 2020 when the RBA acted to cut rates as part of monetary policy stimulus measures.
As noted by the RBA Board, the economic conditions are now in place to warrant normalising interest rates. In simple speak, the historic low rate market was not normal it was suited to the extraordinary circumstances caused by the pandemic. Now the economy has recovered, it’s time to get back to normal. Something most Australians are looking forward to doing themselves after years of pandemic restrictions.
For car buyers, the burning question will most likely be if it will still be possible to achieve cheap motor vehicle finance rates post this RBA rate rise? From our viewpoint, we will continue, as we always have, to focus on achieving better car loan interest rates for our customers. The cheapest rate that meets the individual requirements and application details.
Securing better car loan interest rates on motor vehicle finance with workable repayments following the RBA rate rise is still possible if car buyers do their homework. We share insights into what actions buyers seeking the cheapest motor vehicle finance can do to ensure they secure the best loan to suit their requirements and circumstances.
Utilise Expert Services and Resources Available
With interest rates now rising, using all the services and tools available could become more important than ever to achieving the cheapest car loan. Both individuals and businesses have a number of resources at their disposal.
When making major financial decisions such as purchasing motor vehicles with finance, for many individuals and businesses it can be extremely wise to seek professional advice and assistance. Jade Car Loans provides expert motor vehicle finance broker services to assist our customers secure the cheapest and most suitable car loans.
Utilising broker services can be a game-changer in the search for the cheapest interest rate car finance. Now the market is changing, buyers may be more astute in wanting to acquire a number of finance quotes to ensure they have the cheapest. This is extremely wise but may have drawbacks. Reports to credit reporting agencies which may reflect negatively in the credit report.
When this process is handled on your behalf by our consultants, the quote requests are not reported to agencies. This means our customers have the advantage of having their loan quote sourced from across many lenders without the negative impact on their credit report.
With rates on the rise, lenders will make their own individual decisions around how much to increase rates in their lending markets. Through using our professional services with our multiple accreditations, customers receive comprehensive coverage of the loan market in securing the cheapest interest rate car finance. These services are available for both personal car loans and business motor vehicle finance.
Using the services of an accountant or financial advisor may also be advisable. Particularly in the choice of motor vehicle finance product by business owners. The interest rate varies across the range of business financed cars – Chattel Mortgage, Leasing and Commercial Hire Purchase.
With rates rising, business operators may want to look more closely at the suitability of say a lower rate finance product for their business.
All buyers can also access extremely useful loan tools including our Interest Rate Comparison Table and our business car loan Calculator. These allow buyers to compare rates and loan offers with what we can offer and to plan how they would prefer their car loan be structured in regard to loan term, balloon and deposit or no deposit.
Another tip: check all the details and fine print of any offers made, especially at the dealer level. Compare them with what we can offer to ensure you are receiving not only a better interest rate but the loan conditions that will suit you over the full term of the loan.
Fixed Interest Rates
Securing a fixed interest rate car loan as opposed to a variable rate loan can represent a saving over the term of the loan. While most car finance including the loan products offered by Jade Car Loans are secured at a fixed interest rate, there are products in the market offered at a variable interest rate.
With a fixed rate, the rate secured remains unchanged over the full loan term. With a variable rate loan the lender can alter the rate in line with general rate moves. The RBA has quite clearly indicated that further rises in the cash rate are highly likely in coming periods. Buyers that opt for a variable interest rate loan run the risk of a higher rate and higher repayments in the future.
Credit Rating
The cheapest interest rates, those advertised by lenders, tend to be for loan applicants with a good credit rating. Unless otherwise specified such as for Bad Credit Car Loans. So fixing any errors in a credit report and maintaining a good credit score is very important to ensuring the cheapest interest rate car loan offer is received.
Individuals and businesses can also improve their prospects of achieving a better interest rate by reducing their current debt levels including credit card balances and paying off other loans prior to applying for new finance.
Timing the Purchase
As mentioned above, the RBA has indicated further rate rises this year. So wherever possible, buyers should look to expediting their purchases to secure finance at the current rather than higher interest rates.
We appreciate that car buying decisions have been frustrated with supply issues over the past few years. To achieve better interest rate car finance, for those that are still facing delays for their first choice, perhaps it’s time to consider other vehicles which are available to drive away now.
Securing better motor vehicle interest rates will still be possible even after RBA rate rises where buyers do their homework and cover all bases.
For better interest rate car finance for private and business vehicles 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.
