For some time now, many Australians have flirted with the idea of importing their desired vehicle from abroad. What with cheaper prices, and high quality models that are sometimes unavailable locally, there are immediate incentives right off the bat. However, when it comes to financing an imported vehicle, just how exactly can you apply for and obtain a car loan? Let’s take a closer look.
The Basics
Although not every lender will be in a position to extend finance towards an imported vehicle, there is an ever increasing number of providers equipped to handle this type of arrangement. Notwithstanding the fact that you shouldn’t have any problems finding a financier, it’s important to be aware that the process will differ to a traditional car loan.
Not only will it be more challenging to receive approval, on account of the increased risk associated with the imported vehicle, but the process will draw out longer too. To the average Joe, this is likely to mean higher interest rates against the loan. Fortunately however, specialist car finance brokers are in a position to help everyday motorists tackle this dilemma and achieve the best possible outcome.
Why is an Imported Car More Risky for a Lender?
There are a variety of factors that a financier is required to consider when assessing a car loan application. As a result, even those lenders who are partial to issuing finance for imported vehicles may decide not to do so. The following are some of the key concerns that a financier may have in this context:
- Car loans for imported vehicles are unsecured, with the asset unable to be used as collateral
- Local warranty coverage is more thorough than most, if not all, vehicles imported from abroad
- Regulatory and safety differences between imported vehicles and local cars introduce an element of uncertainty to properly value the car in the Australian marketplace
- Resale of an imported vehicle may take much longer due to the highly unique nature of the car, particularly if it is left-hand drive
What Else Should I Consider?
One of the most overlooked aspects associated with importing a vehicle are the ongoing costs. For starters, insurance premiums are likely to be significant given the niche focus of coverage required. In addition, any parts or repair work required to be carried out on the vehicle could well attract a premium, or instead force your hand as far as which mechanic you are able to approach.
What is by far the biggest potential pitfall for import owners however, is the cost to convert any specific features or equipment on the car to ensure they are in accordance with local regulations. If you don’t address this, you may well have a car sitting in your garage that you can’t even take out on the road.
The Fincar team is here to help you with all your financing needs. Contact us today to help arrange your next car or equipment loan.