Here are a few misconceptions about car finance.
If you’re in the market to buy a new car, you’ve probably already conducted some research. The problem with a lot of research is that you could often get mixed signals. Car dealerships, financing companies and even peers, are probably giving you some contradictory information. Luckily, you’ve ended up here – we’re going to debunk a few myths about car finance that you may have heard.
1. Paying cash will get you a better price
This is not always the case, cash isn’t always the king any more. You’ll find that when most dealership find out you’re paying cash, they may be less open to negotiation than if you were taking out finance as it is assumed that you have enough money regardless of price.
2. Interest rates are fixed
Watch out for headline interest rates. These can exist to get your attention to initially draw you in to a particular deal. Interest rates are definitely not fixed, in fact they normally vary depending on the customers previous credit history. .
3. The Car Must Be Brand New
Nope! Many people think that in order to get finance for a car, the car you intend on purchasing has to be exactly that – new. Car finance consultants exist to provide you with your finance options you need to apply for the loan to purchase any car (within reason), without having to worry about spending all your hard-earned dollars. Look out for great second-hand cars and chat to your local car finance consultants.
4. You must get 100% financing
Again, incorrect. You can chat to your loan adviser about being flexible with the finance terms depending on how much money you have available upfront. A larger deposit can mean you are eligible for more favourable terms to your loan.
5. Applying for a car loan has to be through the dealer
As mentioned earlier, most dealerships have loan companies that are affiliated with them. It is often deemed as a good selling point for you to choose a particular dealership based on a good relationship with a financier. However, the dealership has nothing to with the outcome of your financial application. You do not have to choose the loan company that your dealership is associated with and you shouldn’t let them sway you into thinking that will be the better option.
6. Only an individual can apply for a loan
If you operate a business and require a vehicle, you are able to apply for a loan under the company’s name. Many people assume that the owner’s name has to be on the loan application but this is not the case.