car loans - banks vs car dealers
11 October 2010
So you're on the hunt for a new car and after scouring dealers' yards you've finally found the car of your dreams. The only thing that's standing between you, and driving it off the lot, is finance.
If you need a car loan in Australia you generally have two choices - applying for financing directly through the car yard, or applying through a bank. It's often really tempting to just go with your dealer and be done with it, but is it your best option? Here are some things to consider.
Dealers may be convenient, but convenience can cost
While going through a dealer may get you into your new car sooner, you'll probably end up paying a higher price over the course of your loan. Remember, the lower the interest rate, the less money you'll need to repay. Hop online and do a quick car loan comparison before you're tempted to sign up on the spot with a dealer. You'll be surprised at the difference in interest rates, fees and conditions.
Knowing how much you can spend before you're tempted to overspend is a really good idea. If you want an idea of what your monthly repayments would be with a Bankwest Car Loan, check out our handy car loan calculator.
Banks can offer you a secured loan
A secured car loan is a loan that has an asset against it, something that the bank can use as collateral until the loan is paid off in full. If, for some reason, you can't pay off your loan the bank will take possession of the items you put up as security to recoup some of the money you owe. A new car is the perfect piece of collateral. Secured loans have a lower rate of interest which means your repayments are lower in comparison to a regular unsecured personal loan or dealer organised car financing.
Banks lend money - it's what they do
Car dealers are experts at selling cars. Banks, on the other hand, make it their business to provide the best deals for car finance. It makes sense to go with the experts.
Financing your car - quick tips
Bank financing to purchase your new car makes a lot of sense but ultimately the decision will depend on your financial situation. Regardless of what you decide, these quick tips should ensure you protect yourself before entering into a financing arrangement.
- never rush into a finance deal. Always carefully consider the features of the loan and ensure it meets your requirements and objectives
- shop around and checkout car loan interest rates, calculate your repayments and learn about fees and charges before you step onto a car yard
- jump online to compare car loans and find a deal that's right for you
- don't get caught out by things you don't know. Arm yourself with knowledge
- only borrow what you need and don't be tempted to over commit yourself
- the shorter the loan term, the less money you'll have to pay in interest and fees
- consider applying for a Bankwest Car Loan and using your new car as collateral in order to secure a lower rate and lower repayments
Finding car financing can be frustrating. We often put ourselves under a lot of stress to get it sorted out as quickly as possible. Remember, a little bit of time spent finding the right deal will save you money in the long run so do your research before you start the hunt.
Important things you should know:
For the Bankwest Car Loan, lending criteria, fees and charges apply. Terms and conditions apply and are available on request.