Secured Car Loan Success:10 Tips for Maximum Value

How to Get More From Your Secured Car Loan


That car that you plan to buy isn’t an investment. In fact, it’s quite the opposite as these vehicles depreciate rather fast. It is for this reason alone why you shouldn’t pay for the interest on a car loan. The thing that happens in most scenarios is that a car’s value drops down faster than you can repay a loan – leaving you in the negative as you’ll be paying for something that isn’t worth it in a few years.


However, we all need to have a ride in order to get from one place to another but not all of us has the money to buy one instantly. This is why there are car loans. However, there is a huge difference between taking a car loan wisely and utilising it to secure a vehicle you can’t pay for.


When you’re planning to finance a car, you’ll have to think not only for its monthly payment, but also for the total cost. Let’s take a look at these seven tips to make the most of your secured car loan.

View our Car Buyer Guide here.


1. Know Your Credit Score Before Heading to the Dealer


If you’re wondering when would be the best time to know and monitor your credit score, it’s when you’re about to get a car loan. Unlike a credit card or a mortgage, people can often get a car loan even if they don’t have good credit. The bad part about this is that you’ll just be paying more. Why do they allow this, you ask? It’s because lenders can easily repossess a car if you decide not to pay up.


For those of you with doubtful credit, you most likely aren’t excited to get a loan so asking for a lower rate isn’t something you’d do. The lenders are aware of this and this is how they make bank. 


There are free tools out there that can let you get an understanding of your credit score. When you know where you stand, you can then see if you’re able to qualify for the ideal loan rates. You can also use our FREE online car loan calculator to work out the amount you will need to buy your new car.


Most dealers often promote nice interest rates when getting new cars. What they leave out is that these are only available for buyers with amazing credit scores. Although mediocre scores can still get a good interest rate, they won’t be able to get the best. Anything lower than that and you can expect rates to scale quickly. Those that have below-average credit scores can expect car loan rates of 10 per cent or even more.


2. Minimise Term Length as Much as You Can Afford


The thing about shorter loan terms is that they have a higher monthly payment but lower interest rates. This is what you should aim for. 


When you walk into a dealership and say you want to finance a car you’d like to buy, savvy salespeople would often negotiate with you depending on your monthly payment and not the total purchase price. With this approach, sales representatives can present you with lower payments but at the cost of a higher car price. 


The more time it takes for you to repay a loan, the higher the interest you’ll need to pay. Aside from that, banks also charge a higher interest rate for long loans, thus increasing the cost of your credit.


3. Deposit 20 Percent Immediately


Besides getting a shorter loan term, you can also avoid having to owe more than what the car is worth by putting money down. This may seem obvious but there are actually a lot of dealers that don’t require people with good credit to deposit money anything at all.


It can be tempting to drive off with a brand new car without having to spend anything right away but that can be risky. In case you have to sell it, you won’t be able to if you owe more on the loan compared to how much the car is worth. By depositing at least 20%, you make sure this doesn’t happen.


4. Pay with Cash on Taxes, Fees and Other Extras


Try not to settle with financing on miscellaneous expenses such as documentation fees, registration fees, sales taxes and anything else. Most of the time dealers would happily include these in your financing terms but doing so isn’t advantageous on your end. The reason for this is because you’ll just be increasing the amount on your not but not the value of the vehicle you’re securing with it.


5. Search for a Competitive Loan


You should also begin searching for a competitive car loan that is based on the total you wish to borrow before you look for a car. The main reason for this is because you’ll simply be wasting time if you go ahead and search for a car when you actually can’t pay the loan for it. That is why the first thing you should do is to find and get a loan that matches your capability.


6. Understand the Agreement Carefully Before You Sign


When getting a car loan approval, be sure that you analyse the contract carefully before you decide to sign it. Your lender also has to explain the terms and conditions well before you agree on anything. Look at the payment penalties, auto protection, variable interest rate, and the like. 


Don’t hesitate to ask questions if you find something that isn’t clear. This is a major decision and you want to make sure everything works out well on your end.


7. Deal with a Credible Lender


Lastly, you want to deal with a lender you can rely on as this can make the whole process go a lot smoother. No one likes to deal with agencies they can’t trust. Having a trustworthy provider gives you the peace of mind in securing long-term finances. Ask yourself first, can they be trusted? How well do I know the institution? Do they process loans faster than others?




If you wish to buy a car with zero interest, then you can always go ahead and pay in cash. But if you decide to get a car loan, it’s important to be as practical as possible to make the most out of it. Get online approval and speak to our car loans team if you want the best deal on car finance

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