The cost of owning a car is what has prevented many people from having a car. Whether you are getting used to or new, cars are just costly and most times, getting them with outright cash is challenging. But that is why there is car finance that takes the burden of saving for years before the car. As long as you can afford to repay the car finance or meet the financial obligations, you are good to go.
Car finance can come in many forms, all of which have their benefits and otherwise. Thus, if you plan to get a car, but it looks like you cannot afford to pay it outright, you should consider going for a cheap car loan. Car finance is not only beneficial when it comes to getting the car you need even when you don’t have the money for it at that time, but it can also be beneficial to you if you get your car with car finance and instead use any money set aside for buying the car to better use such as investing. This is ideal for businesses, with the Australian government rolling out new regulations such as instant asset write-off and temporary full expensing . Car finance is not only restricted to owning a car; it could also be to enjoy possession and use of the car without any actual ownership.
Types of car finance include
Are you looking to buy a car? In Australia there are numerous car financing options available for both consumer and commercial needs.There are a lot of variables involved in the car loan process Some of which are listed below:
Secured Car Loan
A loan can be secured or unsecured. A loan is secured when it has security attached as a condition to getting the loan but unsecured when you simply have to apply and meet basic requirements from the lender for getting the loan. With a secured car loan, your motor vehicle is always at stake and should you default on the loan terms; the lender can take the car used as collateral for the loan and sell it to recoup their losses. In a way, this is tricky, but it also promises lower interest rates, which makes it even as long as you meet all the terms of the loan. You have nothing to worry about. Every car loan includes some of the following terms
In every loan, including car loans, the interest is arguably the most important thing. It is what the finance company charges you for giving you the loan. Thus, car finance interest rates is the first thing to check when getting a motor vehicle loan. The interest will generally be calculated per annum on the loan balance, and you must consider several loans and compare the interest rate before you make a final decision. The interest rate could be fixed or variable.
Loan duration varies between two to three years on a short term loan and five to seven years on a long term loan. Whichever you go for has its benefits, but a long term loan means you will be paying fewer repayments while you will end up paying more interest too.
Generally, car loans have monthly repayments, but there are times it could be weekly or fortnightly. It all depends on your financial position. It is always better to fix a repayment that will allow you to pay as fast as possible without being uncomfortable.
Fees & Charges
Loans also come with other fees and charges, which can increase how much you will end up paying. Such charges and fees include ongoing fees, break fee, late payment fee, discharge fee, upfront or establishment fee, etc.
Another form of car finance that you can consider giving a try is a car lease. It is simply renting the car to use for the time you need it. Leases are generally short-term car finance in nature, and this is when they are most effective. You don’t have any stake in a leased car beyond the possession and use for the period. If you need a car for short term use, this is definitely something you should consider. But if you will be using the car on a more permanent basis, a lease will cost you more in the long run, so it is not advisable in that condition.
ABN Car Loans
If you are a newly established business looking to get a car for your operations, you might find it difficult to find a lender who will give you car finance. In most situations, lenders require a business to have been in operation for at least 24 months before they give car finance. This is not convenient for new businesses, but an ABN car loan provides an alternative. Through it, businesses who have an Australian Business Number but are yet to spend up to two years in operation will get an ABN car loan. All they have to submit is proof of credit with their ABN registered for GST.