Is it time for you to buy a vehicle? If so, you may be a little worried about finding the right car finance deal for you. Some consumers worry that they won’t be approved because of outstanding debts or credit history blemishes. However, that doesn’t mean you can’t find a good loan that will allow you to buy a good vehicle. There are many different types of lenders out there offering car finance. Fortunately for Australian consumers, loans can conveniently and affordably make a vehicle available. We all know how important it is to be able to get around in a car that works well.
Buying an old car in cash subjects the purchaser to a lot of possible issues. You may have to worry that your vehicle will break down and leave you stranded if it is old. You may also have to worry that you will end up having to pay a lot in repairs if you buy an older vehicle. If you don’t have a lot of money saved up, you’re going to need car finance to buy a good vehicle. Car finance allows you to make a monthly payment rather than having to give the full amount to the car dealership to drive off the lot.
In Australia, not all areas have enough public transportation offerings to make it possible to get around without one’s own vehicle. Although some urban areas offer a lot of public transportation options, generally speaking vehicle ownership is necessary. Australian consumers routinely rely on Stratton Finance car finance https://www.strattonfinance.com.au/car-finance/car-loan to purchase new vehicles. Fortunately, there are many different lenders down under out there to chose from and to do business with. If a consumer isn’t happy with a particular loan offer, it’s always possible to apply with another lender to see if a better option is out there. The number one thing is to make sure that you don’t spend too much on interest when you use car finance to make a vehicle purchase.
Get started searching for the perfect vehicle. Once you find a vehicle that will meet your needs, you can find financing through a bank, credit union, or car dealership. A lot of dealerships offer their own financing. Never forget that you have options out there. Don’t feel trapped into agreeing with one option that includes a high interest rate or is unaffordable to you. Fortunately, Australian consumers can take advantage of competition when looking for car finance. Car finance will allow you to drive off the lot today in a good vehicle that will work reliably for years to
Traditional car purchases involve two parties, the buyer and the seller. However, if you introduce your work employer into this relationship, you have got yourself a way to save a fortune. This is what is known as a novated lease. It can seem kind of scary at first, but it is genuinely something worth looking into.
What Is A Novated Lease?
Most regular car loans are paid using your salary after taxes have been paid. When you pay for a novated car lease, your payments come out before taxes do. Exactly what creates this type of lease? It means that, legally, you’re introducing a third party into your purchase agreement for your new car. This third party is your employer. Essentially, this is a way for you to pay for your new vehicle by having your employer make the payments for you out of your paycheck using pre-tax earnings.
How Does It Work?
Most novated leases are for between two to five years. After this time period, you have the ability to keep the car or trade it in for a newer model with a new lease. This type of lease allows a business or an employer to lease a new vehicle on behalf of their employee. The payments are the responsibilities of the employee, not the business. The main difference between a normal finance and a Stratton Novated Lease is that all of the vehicle payments will include running expenses.
Benefits Of A Novated Lease
There are many benefits to taking out this type of lease instead of a regular finance loan on a new car. The main benefit is that it is very tax-effective because you are paying for the running costs of the new car using your pre-tax dollars. Another benefit is that you will have increased buying power from using a fleet company. When you get a novated lease using a fleet provider, you will get a much larger discount by utilising the buying power in order to get the vehicle instead of just walking into a new car dealership. Additionally, the ability and flexibility to exchange your car when your lease expires is another benefit. Dependent on how the lease was structured, you will either be able to pay out the residual left on the car or exchange it for a newer model after your lease is up.
Risks Of A Novated Lease
Along with the benefits will always come some risks. One potential pitfall that people should be aware of is that the government has been slowly winding down the tax benefits of using a novated lease option. Additionally, you will need to not only have an employer with a pre-tax salary, you’ll need to have that salary continue in order to continue paying for the car. Job security is very important for keeping up with your lease. The biggest downside and risk of these types of leases is the fringe benefit tax. If you lose your job, it could be very hard to continue making your payments.
When buying a car, you ought to shop for the right model, get a good price, and choose the affordable funding option. If you choose car finance as your funding option, then there are certain choices and considerations that you have to make. The two major benefits of borrowing money wisely to fund for your car’s purchase is that you’ll spend less on your vehicle and have flexibility in changing your vehicle and fund other projects within a few years. It’s prudent to plan ahead for your car finance before you even start window shopping for cars. Here are tips to guide in making a great car financing deal with confidence.
Manage your credit well
Your credit score and income will determine whether or not you’ll be approved for the Stratton Car Loans. Your borrowing history comes into play when lenders start reviewing your financial discipline and ability to repay the loan promptly without fail.
Having a good credit score is a big plus, because it gives you higher chances of approval and an allowance to pay lower rates and total interest costs based on your interest rates. Since all U.S. consumers are entitled to a free credit report under the law, you can check your credit and fix any errors as much as possible because lenders make decisions based on your credit score.
How much you intend to spend
Decide on how much you’ll spend on the car in terms of down payment and monthly payments before you start shopping for your desired car. This is very vital because salespeople are very good at convincing potential customers with fancy math, and most people end up purchasing too expensive cars that don’t even fit their lifestyles.
Although it may hurt to write a big check upfront when making a down payment, it’ll reduce the amount of monthly repayments in the long run. On the flip side, monthly payments are the regular payments that you’ll make on a monthly basis for several years. Therefore you should keep your monthly payments level as low as possible because you might face unexpected future expenses in the coming years.
Look at the picture
When car buyers lose perspective, they fall into the traps of buying an expensive car with features that don’t fit their budgets and focusing on the monthly payments instead of the purchase price and cumulative cost including interest. Surprisingly, some dealers encourage potential car buyers to focus on monthly payments. Hence, you can change the monthly payments to make them more flexible by stretching out a car finance to last for several years, even though it may cost higher interest costs.
Moreover, there is a chance of getting upside-down on your car finance when you owe more than the value of the vehicle. Always focus on protecting yourself and your loved ones financially when going for car financing because the lender is already protected and can repossess the vehicle if you fail to make repayments.
Understanding Car Finance and the Options Available
The process of purchasing a new car can be complicated. Before making a selection of a particular brand, the vehicle should fit the profile of the needs it ought to address. Once you settle for a particular choice, the issues of financing the vehicle’s purchase should be addressed. Any car finance option you opt for should be well within your financial means. Here is a look at some key auto finance considerations that are important for you to make a wise choice.
Developing a budget is the first ideal step for you to make a comprehensive assessment on how to finance the car you desire. Issues related to the vehicle that need careful consideration include the maintenance cost and the purchase price. In addition to this, you should account for the depreciating value of the car. New cars depreciate faster as compared to older vehicles. However, the maintenance bill for older cars is higher than newer automobiles. After analyzing all the above, you can then make an informed choice.
Car Financing Options
Traditionally, the purchase of a vehicle was made by cash proceeds. A significant portion of auto buyers still prefer a cash funding method. One advantage of this plan is the one-time payment feature that gives full ownership to the purchaser. Upon making the purchase, you can then dispose-off the vehicle whenever you deem it fit.
Taking up a loan as a Car Loans at Stratton Finance option offers you use with no ownership rights until the debt is cleared. At the end of the repayment period, the car title is transferred to you. This option favors those willing to buy the vehicle, but are unable to raise the initial asking amount. It involves making a down-payment and clearing the balance over the contractual period.
A car leasing option is similar to renting a car in the sense that the monthly fees paid cater for the depreciating value of the automobile. However, for the lease option, you have the option of buying the vehicle at a set price or opt to lease another at the end of the lease period.
The choice you make depends on your preference. If you would prefer to change your car every two years, leasing is the car finance option for you. If your plan involves retaining a vehicle for more than five years, go for the cash purchase option.
Get the Best Deal
Shopping around helps to give you a sense of the market trends. It also gives you an array of choices of the prices of the vehicles you intend to purchase. The same principle of shopping around should be applied in selecting a car finance option. Doing this helps broaden your choices in light of the discounts, loan interest rates, and payment plans available to you.
Understanding the Terms and Conditions
Every car finance method comes with a detailed set of requirements. It is therefore prudent to comprehend the stipulated terms before signing away.
Exercising prudence in all financial matters is important. This principle is equally important when acquiring a car. Ensure that the car finance plan you opt for does not create a dent in your financial plans.
It seems like more people are debt-hungry in today’s world than ever before. Many people bite off more than they can chew, living above their means. They take out expensive mortgages on homes, put many transactions on credit cards, and take out car loans on pricey, new or near-new vehicles. However, although uncommon, it’s possible for some to responsibly take out a car loan https://www.strattonfinance.com.au/car-finance/options/car-loan.aspx
People who aren’t cash-strapped might not be able to afford the cash purchase of a vehicle, instead opting for a car loan. Vehicles are needed for virtually every day-to-day function, especially for those who live in rural areas.
Whether you plan on being responsible in taking out a car loan, or not, here are several ways to find successful terms on your upcoming car loan agreement.
Shop as many dealerships as possible
No matter how good a deal one dealership can provide to you, it’s a good idea to shop around at as many dealerships as possible. Many consumers trust the largest dealerships around to provide them good deals on vehicles. However, you’ll never know if other dealers have better deals if you don’t try.
Take written estimates from dealerships and banks
It’s often difficult to negotiate favorable car loan terms with dealerships without having proof of what other sources can provide. Get hard copies of offers that various car dealers can offer you, rather than simply writing them down yourself. Also, ask them if they can provide you printed estimates, rather than them writing it down by hand. For all that other dealers know, hand-written estimates could have been written yourself, rather than obtaining them legitimately.
Contact financial institutions to find a good car loan
Places that sell cars usually have agreements with specific banks to provide financing agreements. When you limit yourself to only one financier, you forego deals that other banks can provide. Contact financial institutions directly — and don’t forget to shop around — to find what car loan terms they offer.
Don’t be too concerned about monthly payments
Not everybody has gobs of cash to throw around on vehicles — and that’s fine. However, some consumers with financed items care more about minimum monthly payments than total value. It’s more important to weigh the entire agreement’s cost in deciding where to sign a vehicle loan agreement, as it will likely save you more in the long run.
Boost your credit score
Consumers with low credit scores get less favorable loan terms than people with high scores. If you have a low credit score, spend a few months raising it before going car shopping.
on’t let dealerships or banks perform many hard inquiries
Hard inquiries, or when banks and car dealers look at your credit score, reflect negatively on your ever-sensitive credit score. Only sign up for car loans after you’ve decided where to purchase one, as asking multiple businesses for financing agreements will likely make your credit score plummet.