admin February 28, 2014 No Comments

A car is probably the second-biggest purchase made by the average person these days, second to that mortgage on a home (although, these days, a university education could probably be considered a purchase that would put the car into third place). Some people are lucky enough to be given a salary package that includes a novated lease on a vehicle. Others, however, need to find some alternative form of finance when they need to get a new set of wheels.

Because car repayments can be such a big commitment, it pays to think carefully before you head out into the car yards. It can be hard to keep your head and make wise decisions about repayments, loans and financing when you’re confronted by an amazing shiny new car and a very persuasive salesperson. The really important thing is to stop yourself from getting in over your head.

Some simple tips will help you manage your car loan by making wise decisions before you begin the process of shopping around for a new set of wheels:

  1. Set a budget. Work out how much you can afford per week or per fortnight and stick to it. Don’t commit yourself down to the last dollar of your paycheck  there is always some unexpected expense that crops up somewhere.
  2. Remember to include things like car maintenance, insurance, registration and fuel in your budget. If your previous car was a frugal little vehicle but the new car that you’re buying to fit in your growing family is larger and has a bigger engine, then you may well face paying more for fuel as well as the repayment amount. If you haven’t bargained on this, you may find yourself in financial trouble.
  3. Shop around. Don’t just settle for the first deal or finance package offered to you by the car salesperson. Take the time to find the best deal that works for you and your situation  or get us to do the hard yards for you. Things to take into consideration include repayment amounts, interest rates, loan terms and whether or not you can make extra lump-sum repayments. If you already have a good credit history with a particular lender (e.g. a bank or credit union) then you may be able to get a better deal with these people, as they already know what you’re like. (Don’t forget to let us know about this sort of thing when you contact us about finding the best car loan provider for you.)
  4. Use debt calculator tools to find out how much interest you will end up paying. You may be surprised at how much more you will end up paying in the long run.
  5. The bigger the deposit you can scrape together on the car, the less you will have to borrow, which means that you’ll pay less interest in the long run. Don’t forget to ask a car dealer (preferably over the phone or via email to avoid being pressured by a face-to-face situation) about the possibility of trading in your old vehicle to cover part of the payment.

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