Check yourself before you wreck yourself


Purchasing a car is an exciting time, but if you don’t have the full amount to pay in cash, what are your options for finance? We’ve seen plenty of situations where people have been unsuspectedly taken for a ride by car dealerships, leaving them in a worse off position.

When someone looks at purchasing a home, usually they will put a lot of effort into searching for the right fit for their finance. Carefully considering your finance options should be equally as important when you’re buying a car. We aren’t going to sit here and tell you not to get your finance through a car dealership, but what we will say is make sure you’re getting yourself the right deal and of course, read the fine print.

Convenience isn’t always a pro

Organising your car finance through a dealership is great for convenience. It’s easy to rock up to the dealership and get the car and finance sorted under one roof. However, just because there’s an easy choice, doesn’t mean it’s the best option for you. A handy tip is to take the time to consider your contract, go over it with a fine tooth comb and ask plenty of questions. Why pay more for a car, when a little research and choosing the right finance can save you money in the long run. We certainly wouldn’t do it with a home loan, although we tend to turn a blind eye when it comes to a car.

Don’t fall for all the fluffy stuff

Falling for a car dealership’s advertisements is about as easy as me falling for a block of chocolate. However, just like that block of chocolate isn’t great for my thighs, that 0% interest deal they’re offering on the car you want may not be great for you either. As much as we may wish for it, there aren’t many things that come for free, so if there’s an extremely low rate on offer, you have to question how the dealership makes their money. Instead, the cost of fees, charges, and the purchase price is heightened to cover the low rate.

Balloons aren’t just for birthdays

Another thing to watch out for is a not so little thing called a balloon payment. A balloon is a final payment at the end of the loan which is the residual amount that you haven’t paid for throughout the loan term. The balloon is designed to lower repayments which are great for cash flow, but not so great when you get to the end of your loan and have a sum lumped on you to repay, forcing you to either cough up the amount, refinance the loan or your beloved car.

From rate to repayment

With car finance, it’s important to shift your thinking from rate to repayment. As previously noted, a lower rate doesn’t equal the best deal, in fact, it will most likely lead to an inflated price which pays the dealer his commission. On the topic of commission, it is important to note that finance brokers are legally required to highlight any commissions received from the loan, so there are no hidden nasties.

Finance brokers have access to multiple lenders along with an array of different products. We can help you determine the loan amount that is realistically affordable for you, as well as ensuring it best suits your individual needs. If purchasing a car is something you’re considering, give us a call. We’re here to help.


*image via pinterest