Purchasing a car is a big decision, as it costs a great deal of money ‒ the kind that most people do not have. Therefore, there are several things to keep in mind if you wish to purchase a car in Brisbane, as car finance options vary widely. Proper planning and careful strategies should be followed to ensure the best possible deal.
Know Your Credit Score
Your credit score will have a significant impact on the cost of the financing. A poor credit score will result in higher interest rates, whereas a strong credit score will result in lower interest rates and superior terms being offered.
It is important that you know your credit score in advance so that you can budget accordingly and preempt the kinds of interest rates you can expect to be offered. You should do this before even setting foot in a dealership so that you know what to expect.
In some cases, a credit score can be bad enough that you may be denied car financing altogether, which means you might need to pursue alternative methods and means of acquiring financing.
Keep It Short
The shorter your loan term, the less interest you will pay. However, simultaneously, the consequence of this is that you will need to pay larger instalments. This will depend on what you can afford and what you have as a deposit.
Higher instalments could be attractive if you have the funds, as it will mean that the car will be paid off more quickly. However, this could put significant pressure on your budget, so tread carefully, as you do not want to run into a situation where you cannot pay your instalments because they are too high.
With this in mind, it is advised to keep the loan term as short as possible ‒ as long as you can afford it ‒ to minimise the loss made on investing in a depreciating asset.
Pay What You Can In Cash
Putting down a deposit in cash ‒ as much as you can afford ‒ will significantly reduce the the size of the monthly instalments. This will help you avoid owing more than the car is worth due to the depreciating nature of such an asset.
If possible, other cash payments should also be made to take care of extra costs that come with purchasing a car. These could include sales taxes, documentation, fees, registration fees and so on. You could always include these in your loan financing. However, this will just increase the cost of the loan rather than adding any value to the car.
If you can pay these off in cash, it will help you avoid wasting money on paying for things that do not actually add to the car’s value.
We at iCREDIT can help you compare loans from various lenders to ensure you get the best deal possible. Contact us today for more information on how iCREDIT can assist you with things you should know before getting financing for a car.