New Car Loan: 7 Absolute Tips to Secure the Best Deals

  • Auto Now Credit are a car finance business for customers with a bad credit history and are struggling to get a loan for a car. Offering second chance loans, bad credit car loans, ABN holder work vehicle loans, rent to own car finance and bankruptcy car loans.
Embark on a journey with Auto Now Credit to discover the best "new car loan" deals in Australia. Our guide is your roadmap to securing the optimal car finance for your brand-new ride.

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New Car Loan: When it comes to purchasing a brand-new vehicle, understanding the intricacies of the landscape can be the key to driving away with the best deal. With research as our compass, we’ve unearthed valuable insights that every Australian should know before taking the plunge.

Our analysis reveals a surprising trend: a significant number of Australian lenders, including some of the most prominent banks, are packaging unsecured personal loans under the ‘car loans’ banner. These unsecured loans, when stacked against secured car loans, can be notably costlier, especially for new cars.

Here’s a scenario to consider: On a typical loan of $35,000, a borrower might end up paying:

A hefty $938 every month on the priciest unsecured loan targeted at new car buyers (with a 20.54% p.a. variable comparison rate). Conversely, the same borrower could be dishing out a mere $692 monthly with a prime lender from Auto Now Credit (at a 6.91% fixed comparison rate). The math is clear: over a 5-year term, this discrepancy can add up to an astonishing $15,000.

So, how can you ensure you clinch the best deal? Let’s gear up and dive deep.

The Essence of a New Car Loan

A new car loan is a type of secured personal loan tailored specifically for brand-new vehicles. The car you've set your sights on acts as collateral. This means if repayments falter, the lender can repossess the vehicle to recoup the loan amount. This arrangement minimizes the risk for lenders and results in a more favourable interest rate for borrowers compared to unsecured loans.

Determining Your Borrowing Capacity

Lenders usually offer new car loans ranging from $5,000 to $150,000. However, the average loan amount for a spanking new car is around $44,547. The actual sum you qualify for will hinge on various factors, including your credit history, income, monthly expenses, and other financial commitments.

Mapping Out the Tenure

The duration for a new car loan typically spans between two to seven years, with five years being the most preferred. It's pivotal to note that wrapping up your loan sooner can mean significant interest savings, although this comes with the trade-off of heftier monthly instalments.

Steering Clear of Hidden Car Loan Fees

To truly maximize your "new car loan" deal, stay vigilant about:
  • Initial setup or application fees
  • Recurring charges (annual or monthly)
  • Penalties for additional payments or early settlements
  • Charges arising from missed repayments

    • Features to Supercharge Your New Car Loan Savings

    Handpick the right features, and you could be on the fast track to massive savings:
  • Option for extra repayments without incurring penalties
  • Facility to redraw any surplus repayments
  • Zero charges for early loan closure
  • Flexible repayment schedules

    • Eligibility Checkpoints for a New Car Loan

    To be a contender for a new car loan, you typically need to:
  • Be aged 18 or older
  • Hold Australian citizenship or permanent residency
  • Showcase a steady income (usually over a six-month span)

    • Accelerating the Approval Process

    Numerous lenders promise the allure of same-day pre-approvals. Having your documentation in order, from proof of identity to evidence of income, can fast-track this process. In most scenarios, you could be flaunting your brand-new car in just 2-3 business days.

    FAQ

    A “New Car Loan” is a secured personal loan specifically tailored for purchasing brand-new vehicles. The car you buy serves as collateral, ensuring that if repayments aren’t met, the lender can repossess the vehicle.

    Unsecured loans can be notably costlier than new car loans. For instance, on a typical $35,000 loan, a borrower might pay $938 monthly on an unsecured loan, whereas with a new car loan, the amount could be as low as $692 monthly.

    The loan amount hinges on various factors including your credit history, steady income, monthly expenses, and other financial commitments.

     The duration for a new car loan typically spans between two to seven years, with five years being the most preferred by borrowers.

    Yes, borrowers should be vigilant about potential fees such as initial setup or application fees, recurring charges, penalties for additional payments or early settlements, and charges arising from missed repayments.

    Opting for features like the ability to make extra repayments without penalties, redrawing surplus repayments, zero charges for early loan closure, and flexible repayment schedules can lead to significant savings.

    Many lenders offer same-day pre-approvals, especially if you have all your documentation in order. Typically, you can be driving your new car in just 2-3 business days.

    The primary difference is the collateral. In secured car loans, like a “New Car Loan”, the vehicle serves as security, reducing risk for lenders and usually resulting in a more favourable interest rate for borrowers. Unsecured loans do not require collateral but often come with higher interest rates.

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