You should save money by knowing your options before jumping into a dealer financed or new car loan for example the Australians have many options when it comes to financing a new car. Two of the best known methods are the dealer loans and new car loans. It’s important for you to know the difference between the two. You can consult any local car finance brisbane for more information.
With dealer loans, all the paperwork is done onsite where you are purchasing your car. Depending on where you are purchasing from, it can end up being cheaper in the long run. With a car loan you have the option of shopping for a more competitive rate and terms that are agreeable to your budget. Knowing that you already have the financing you need for a new car also gives you more leverage in negotiating he prices.
Dealer finance interest rates can be lower but are often only available on certain makes and models. Many car salesmen are paid for the financing which will push the interest rates upwards. The interest rates for car loan will be competitive with other lending institutions. This allows you to choose the one that has the best rates, terms and repayment options for your circumstances. The interest rate for a car loan is higher than that of a dealer.
In matters of loan term, most finance dealers will offer terms of more than 3-4 years. You can be charged a fee if you attempt to pay your car loan in full before the terms ends. In car loan, most lenders will allow up to seven years for a car loan giving you more flexibility in choosing your repayment. The longer the term the more interest you pay over the life of the loan.
As a drawback, in dealer finance you most likely need to have a near perfect credit score to qualify for dealer financing. It’s applicable for new cars only. With the car loan, you may be exposed to a higher interest rate depending on the type of car you are trying to buy.