Cheapest Car Loans in Australia: How do They Work?
How to get the cheapest car loans in Australia
Australians spend billions of dollars every year on their cars, from purchasing vehicles to paying off car loans. Finding the cheapest car loan for you could help save you that little bit extra each year, and allow you to enjoy being on the road for less.
There are a few pitfalls you’ll want to avoid when looking for cheap car loans though – and it’s really important that you don’t go for a vehicle that you can’t afford, however cheap the loan may be to get it.
What is a cheap car loan?
If you have a good credit history and are seen as a low risk to the lender, you may be able to get one of the cheapest car loans available on the market. Generally, cheap car loans have lower rates of interest and allow you to get a car you may not have imagined possible by using finance.
For people who are in a good financial situation and are able to pay back cheap car loans, these can be a great option for getting the vehicle that you want. The issues come when people have poor credit or sign up for a cheap car loan which they then struggle to pay back.
When is a cheap car loan too cheap?
Just like the global financial crisis, some experts are concerned that cheap car loans could eventually lead to another crash.
There is a concern that as cheap car loans become more and more popular, lenders only need to wrongly predict the market and set repayments too low for big problems to start arising.
A flood of used cars in the market could see values falling and people with cheap car loans finding themselves in negative equity at the end of the loan term.
It’s useful to apply the principle that if a cheap car loan sounds too good to be true, it very well could be.
You need to look out for additional fees; if something seems too cheap, try and do some research as to how the lender might be making back the money in other ways. There are often hidden costs that you should ask about upfront before signing any agreement.
How to know if you’ve got a good deal on your cheap car loan
This is something that’s hard to know straight away; and for some people, they only find out when it’s too late. It’s really important that you ask for expert advice before agreeing to the cheapest car loan you can find. With our decades of experience, we can help you to separate the good loans from the not so good, and we’ll let you know when something sounds a little too cheap.
Asking for help before agreeing to a cheap car loan could help you to avoid the situation where you only find out that you haven’t got a good deal when it’s too late, and you are left with a car whose value is less than the loan you are paying back.
Using the right lender for your cheap car loan
Unfortunately, there are both dealers and lenders out there who will try to encourage you to take a cheap car loan for a vehicle that could simply be out of your price range. You should never feel pressured to take a loan, and if you get a feeling that it’s simply too good to be true, then the chances are you’re right.
Finding the right lender means you’ll be able to ask questions and clarify anything that you’re not sure about. If you need time to budget and to prepare yourself financially, your lender should always be understanding and help wherever possible.
At Positive Lending Solutions, we aim to make the process as speedy and efficient as possible. We can guide you through the process and help you find the right cheap car loan for you.