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Need finance for your car?
Getting finance for your car can be confusing, epecially for first timers. Click here for helpful advice on what you need to consider and how to make a finance application.
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Graeme Moore
What you need to know about car finance
Is a bank really cheaper than a finance company?
Loan options from finance companies are often tainted by fears of exorbitant interest rates, penalties and financial suicide. In reality, loans from finance companies can often work out far cheaper than loans from banks. How?
Let's do the maths!
If you borrow $10,000 over a three year term at 14% interest, your monthly repayments will be roughly $341 per month or around $85 per week. At the end of the loan term you will have paid a total of $2,304 in interest on top of the $10,000 you borrowed. Seem like a lot? Let's compare this to someone who borrows against their mortgage.
If you borrow $10,000 at a typical mortgage rate of 6% over the typical mortgage term of 15 years, it will add approximately $84 per month to your mortgage repayments. While this is significantly cheaper than a finance company in terms of monthly repayments, because the term of the loan is far longer you will end up paying a massive $5,190 in interest. If your mortgage term is 20 years this amount increases even further.
So which is better?
In the short term, going to the bank to finance your new car seems like a far better option due to the low repayments. However those repayments are low because of the lengthy loan term which means in the long run, the bank can be significantly more expensive. What you need to do is to evaluate your situation and priorities to make a decision that suits you.
Another solution may be to investigate setting up a revolving credit mortgage or second mortgage account which allows you to pay off the car loan at a far quicker rate while still taking advantage of the low interest rates. These options aren't available to everyone so you may need to discuss different options with your bank manager.
If you need any advice or information about the finance options available to you, we encourage you to email us on info@idealcars.co.nz or give us a call. You can find all of our details on the contact us page.
How to apply for your car finance:
Applying for finance for your next car is easy. Simply fill out the finance application form below, print it out and submit it. We'll handle the rest! If you have any questions feel free to contact us and we'll get you on the right track.
Worried about getting a car loan?
Getting finance for a major purchase can be nerve-wracking, especially if it's your first time.When you apply for a loan, the finance company or bank you apply to are very careful to set up loan conditions that you can afford, as at the end of the day a defaulted loan for them is lost revenue. You don't need to be worried!
If you need advice on what to do about getting a loan for a new car you can visit www.sorted.org.nz , or give us a call at the yard and we'll let you know how you can make sure you get a loan that suits you.
Drivers Licence Fields
Below is an example of where you can find the required fields on your drivers licence.
