Getting the best car finance deal

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Everyone wants “the best deal” right? Well, here’s a few little tips to make sure you protect your credit rating and ensure you get the best package all round when purchasing a car.

Firstly, all you see these days are low rate, deferred payment options, and offers from banks and finance institutes offering some form of finance, while this may be tempting you need to be aware that every application you make is a ‘hit’ on your credit score.

What does this mean for you?

You may be “shopping around for the best rate” by applying at a few different lenders or car dealerships, however by doing this multiple times, you are actually reducing your credit score which could affect the actual rate or approval when you finally decide on the right vehicle.

So here’s my first tip, do not “just apply” to find out a rate. Do your homework, you can usually find out online if that’s more convenient, but always look at the fine print and don’t be afraid to ask any questions.

Secondly, interest rate figures have been drilled into us for years, but don’t be blinded by the simple figures. Instead compare different loans or different deals on the weekly payment you will be making, as this will include fees, charges, the total price of the car, and will help you better compare different packages.

It will also help turn that 5.8 per cent or 9.7 per cent into a real number which you can work into your weekly household budget.

And finally, be wary of unusual interest rate offers such as zero per cent, approval for these loans are harder to achieve, and there are usually special conditions and requirements to be met.

The most common are things such as large deposits or large balloon payments at the end of the term.

These offers also usually only apply on loans for three years, not the usual five or seven-year term.

Due to the shorter term, the repayments may be higher and thus unaffordable.

Overall, there are some great offers out there, and as long as you do your research, you will be able to get a great deal on your next new car.

Debbie Clark is the Dealer Principal at Nepean Motor Group. Visit www.nepeanmotorgroup.com.au

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