5 tips to save you $100 per year on your car loan

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, updated on August 4th, 2023       

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Tips to save on a car loan

There are many costs that come with owning a car such as fuel cost, repairs, maintenance, the works. Car expenses are one of those big expenses you must carefully factor into your budget. However, timing your purchase on a car can help you save up to $100 p.a on your car loan which can offer a much-needed breather. Here are five reasons why timing your next car purchase will help you in the long run.

1. The time of year has a domino effect

The period in which you choose to purchase your car has an effect on other initial costs that will come with purchasing your car. If you buy your car during peak season or at an end of year sale (EOY) where the rates are reduced, it will spill into the amount you borrow for your car loan along with the interest rate that comes with it. According to Budget Direct research on car expenses, Quarter 2 and 4 of the year expressed a reduction in the weekly car loan repayment costs by $2 which equaled to just over $100 being saved.

2. It gives you time to research

Taking your time to research and compare your options is always a sure way to help you save on your car. It also will reduce your chances of purchasing a lemon. Australians that did not put in adequate research to purchasing used cars ended up spending $11,000 more than they were supposed to on a car. Avoiding impulse purchase will play a role in also reducing your maintenance costs and repairs by getting a good new or used car.

3. You can be better prepared at a dealership

When you go to a dealership unprepared in terms of what to look for in a car you can be buttered up by a smooth sales pitch and end up driving off the lot with something you could later regret. Research by Roy Morgan revealed that 67.6% of people conducted research before purchasing a car. Some consumers continue to use their devices to research while at a dealership.

4. It can help you manage costs effectively

If you already own a car and looking to upgrade to a second one that is fuel efficient or comes with better safety ratings and features, then timing your purchase will work to your advantage. The average weekly two-car household cost in Australians major cities on their car loan repayments was $121.81, while regional cities paid a weekly average cost of $121.79. By timing your purchase you can reduce the amount you will have to repay on your loan.

5. You can find a lender that has the best rate

Think of the type of car your purchase as being connected to every expense that could possibly pop up, even your car loan. The amount you are able to access will determine what type of car you can afford. However, the type of lender you choose to use when it comes to financing your vehicle will also affect your car loan rates. Always keep in mind that lenders have different rates which will affect your repayments. Therefore, taking the time to compare various quotes will help you effectively manage your costs throughout the loan’s term.

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