Instead of paying thousands or even tens of thousands of dollars out of your own pocket, a car loan gives you access to the funds you need and a payment plan that makes the financial commitment easier to deal with.
But finding the best car loan is sometimes a challenge. There are different types of car loans, different repayment options and all kinds of different car loan providers that can be overwhelming to consider.
Having a few car loan tips, however, should help you get a better idea of what you need from your car finance so that it is an easier step to take.
Find out about car finance categories
Before choosing a particular car loan it is important to know what kind of car finance products are available.
A secured car loan, for example, is very different from an unsecured car loan because it uses the vehicle as security for the finance.
Similarly, one car finance company may specify that it only provides car loans to new or as-new vehicles, while others could offer finance for used cars that are up to 8-10 years old.
While not all of these car finance categories will be relevant, looking into them will help you figure out exactly what you want.
Compare car loans
When you start searching for your ideal car you have the chance to inspect and test drive different options to get a better idea of which car will be right for your needs.
Unfortunately you cannot test drive a car loan before you get it and start making repayments. But you can get an idea of what a particular car loan will be like by looking at the features and comparing different options.
Car loan features often vary between providers, so you could find that there are different interest rates, repayment schedules and even different options or fees when it comes to making extra payments on a loan.
Consider car loan features
Once you have narrowed down the number of car loans you are considering, the features of each will become more important.
Interest rates are one of the first things people consider when looking at car loan features, as they can make a huge difference to how much you pay for this type of finance.
But other features, terms and conditions that could impact on how well a car loan works for you include:
- The loan term
- Additional repayment options (with or without fees)
- The repayment schedule (weekly, fortnightly, monthly)
- Overdraft or refinancing options that provide more flexibility; and
What car costs can be covered by the loan?
Considering these elements and reading through the fine print for every car loan you are considering will help you pick one that is easy to manage now and in the future.
It takes both time and money to pay off a car loan but finding the best option means you can keep costs as affordable as possible.
With these tips and the support of savvy as a finance broker in the comparison process, your car loan choice should be quick, easy and ideal for your needs.