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It is very important for you to be well informed prior to looking for the right car loan, as every car loan provider will work in slightly different ways, and this can impact on what kind of car loan interest rates you could achieve, and where you may obtain car loan approval with one motor financier, you may not with another on the exact same proposal.
1. Ensure You Know What Is On Your Credit File
You are able to obtain a free copy of your credit report by going to www.mycreditfile.com.au. You can know exactly what is on your credit file prior to applying and this can give you the best chances of obtaining the right car loan for you.
2. Understand What Cars Are Able To Be Used As Security For Car Loans
Most lenders will restrict to financing cars that were built in Australia only, and each and every lender has some differences in regards to how old the vehicle can be, and also of where it can be purchased from. It is a good idea to research through an introducer that uses multiple lenders, as they can usually advise you upfront on what cars can be financed and which ones can’t and there are always some exceptions to the rule on a case by case basis.
3. Enquire About Everything Involved In Setting Up The Car Loan
A lot of people feel that the interest rate is the most important factor of a car loan and only shop around for the best car loan interest rate. Whilst the interest rate is important, it is only one part of your car loan that can determine whether it is the best overall deal for your proposal. Make sure you find out about all the fees and charges, as this can often outweigh a cheap interest rate depending on what your intentions are with your car loan. Most car loans will also have monthly account keeping fees, establishment fees, early termination fees and introducers may also charge an origination fee.
4. Shop The Finance And The Vehicle As Two Separate Transactions
With many of the manufacturers offering these ridiculously low car loan interest rates, it would be a smart idea to shop these two transactions separately. Quite often you can pay too much for your new car purchase in order to obtain a low interest rate and overall you end up paying more. These offers can also restrict you on certain conditions you may want with your car loan.
5. Be Prepared
If you are well prepared when organizing your car loan, the motor finance provider will have a much easier job in determining what they can obtain for you as an overall car loan proposal. Prior to engaging a credit assistance provider, you should collate all relevant pay information and any proof of debts, so you can have your information on hand when ready to apply.
About the Contributor
Shaun McGowan is the co-founder of CarLoans.com.au. They provide free car loan comparisons of industry leading Australian financiers to consumers wishing to buy a car on finance.