..and how to avoid them
When you’re looking for that new car, ute, bike, boat or whatever vehicle it may be, it’s always best to be prepared. Here’s a list of some of the most common car loan mistakes people make and what you should keep in mind when looking for that new ride.
1. Choosing the car first
Buying a car is exciting and fun. It’s ok to get carried away when you’re shopping around, but you need to take a step back and consider how you’re going to finance it first. You need to avoid falling in love with the car before you know how to finance it.
It’s best to get a free pre-approval first on how much you qualify for, then you can shop around and avoid the pressure of jumping on the first car you fall for.
2. Focusing on payments rather than price
If you’ve already decided on getting finance for your new vehicle, don’t just focus on how much your repayments are going to be. Choosing a longer term on your finance may mean lower repayments, however, you will actually end up paying more for the vehicle (as extra interest is paid throughout the longer term). Your focus needs to be on the vehicle price first. Too many people are happy to pay the full amount for the vehicle, as long as they get the finance to cover it.
Note, you can still negotiate on the price. You should always focus on trying to get the best cost price first. So put on your best negotiating hat and get the right price.
3. Not comparing your options
There are a large number of finance options available when it comes to getting a new vehicle. Some include personal loans, business car finance and leasing. It can be frustrating and really confusing when all you want is to get on the road in that new car. It’s not hard to do a little homework beforehand and find a broker who wants to find the right type of loan that best suits your personal situation. This means looking outside your bank and your car dealers and finding a licensed broker who can advise you in the right direction.
4. Not getting Pre Approved
Before browsing for your vehicle, getting your loan amount pre approved will allow clarity over what you can and can’t afford. A pre-approval costs nothing to do and once you have the knowledge of what you’re approved for, you can shop around more and even look at private car sales.
5. Rushing to on-the-spot car dealer finance
Quite often you will find the car dealer will encourage you to make an on the spot decision aided by the help of their own car finance department.
You see, with car finance in Australia, the “brokers” that work for a car dealership are not required to be licensed. Unlike all others, including all of our team here at Findyourcarloan who are fully licensed and have to follow regulations.
Our licensing ensures, you the client, that our team will always strive to find you the best deal, suitable to your personal circumstance. Which means we look out for each client, as directed under the best interests duty.
More often than not, you will find these on the spot car dealer finance dealers do not need to.
Don’t get ripped off, do your research and talk to a licensed broker today 1300 00 3925.
