Will there be a balloon payment?
Most Aussies are likely going to take out a car loan through a broker or with a dealer at a dealership. According to the Royal Commission, 39% of cars were financed through a dealership. Loans come with a range of features that you need to keep an eye out for. Balloon payments are one of these features that allow you to make low weekly or monthly repayments, but you have to pay a lump sum at the end of the loan term. Asking if the loan comes with this feature can help you plan your finances accordingly to meet repayments.
How long is the warranty?
Knowing how long the warranty on your car will last is essential for your car budget. A car warranty can help you buffer repair expenses. A car that comes with a short warranty can cost you in repairs over time. Manufacturers are now producing cars that come with the improved warranties that can range from 4 years to 7 years. You can also check if your dealer’s add-on of an extended warranty is worth it.
Are there any additional fees?
When taking out dealer finance it is vital to read the fine print and terms carefully to avoid any surprises later. Ask your dealer if there are fees such as establishment fees, account keeping fees, and registration fees. You can also ask about late penalty fees or additional charges that may come with paying off your loan early and add on fees. You can ask your dealer if you can insure with an insurer of your own choice and if you can choose your own mechanic to repair the car. If they already offer this, you can ask about the fee involved.
Ask to see the invoice of the car
Checking the invoice of the car can reveal all the expenses you are paying for. For example, if you purchase a Toyota Corolla for $21,240 but the invoice shows you that the total costs are $23,000 you will be able to track why you will be paying an additional $1,760. Keep in mind that adding special features to your car and add-ons can increase the total price you will end up paying towards your car. This can also affect your overall loan repayments.
What is and isn’t covered by your warranty
Knowing what is and is not covered in your warranty is usually stated in the terms of your contract agreement. This can help you know what you can and cannot make a claim on. Having a checklist of things that you are not willing to budge on can help you refine your search for a car that is suitable for your finances.