Australia’s automotive industry certainly hasn’t been immune to the current economic crisis. The Federal Chamber of Automotive Industries recently released the news that new car and truck sales were down more than 18 percent in January 2009 alone.
Not all news is bad, however. This week’s interest rate cut and the government’s new fiscal policy means that now may be the time to consider purchasing a new vehicle.
Given the current economic situation, there are a few more challenges regarding obtaining car loans. The following tips will help you make the most informed decisions regarding your car financing options:
1. You have options. Many dealerships and car finance companies are offering great car finance rates, so do your homework when searching for competitive financing. Be aware of companies that offer deals that seem just too good to be true, as they are often laden with hidden fees, such as early repayment penalties and monthly loan service fees. Instead, stick with an established lender that can offer you a wide variety of car finance options.
You may find that your dealership offers rebates as part of their financing package, or that your local bank can offer you the better deal. The bottom line is that you have to do your homework and spend some time looking for the best financing options.
2.Your credit must be worthy. If there’s one thing that we have all learned from the economic crisis it is that good credit equals great options in terms of car loans. Order a copy of your credit report before heading out to look for a new car, and make sure everything is in order before requesting financing through any source. If you credit report is flawed, you may very well experience difficulty in obtaining a secured loan.
3. Above all, consider your budget. The better educated you are about the car loan process the more likely you will be able to snag a great rate. Set a budget for your auto loan and then determine how much you can comfortably afford to pay each month. Then the most important thing is to ensure you stick to this budget! Even going over by a few thousand can make a big difference to your repayments in the long term.
Work with the lender to establish a reasonable term for your loan, and obtain your car loan ahead of time so that you can stick to your budget. In addition to the financing terms, ask the lender if there are any other fees related to the loan. Many customers get caught out with monthly repayment fees, administration fees and more. Finally, ask if the secured loan will have a fixed or variable interest rate so that you can determine if fixed repayment terms are best for you.
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