How to get a Car on Finance

Thinking of applying for a car loan? Buying a car is one of the biggest investments we make, but for many, buying a car is not achievable without car financing. Before you start looking for your dream car there are a few things you need to know before applying for car finance.

Shop for Cars as put together a quick guide on how to get a car on finance in Australia.

1. Know your credit score

A credit score is a number that is used to represent your reputation as a borrower. The higher your credit score the more likely you are to be approved by the lender.

Lenders will determine your credit score based on your credit history. They will also look at your current levels of debt, how many bank accounts you have and your repayment history. 

You can improve your credit score by paying debts on time, limiting your credit card transactions and checking your credit report for any inaccuracies. It’s important to know that some lenders may rank your credit score differently, so it is so important to consult with all relevant parties to get the best accurate score.

Credit scores between 666 and 1200 are considered likely to get a car loan approval. 

2. Understand the different finance offers available

In Australia there are over 50 car financing lenders. As such, different lenders offer applicants different rates on their loans. Some deals could save you thousands in interest repayments, so it is so important you look at all the different rates available.

The average car finance rate in 2021 is between 5% and 17%. Along with the interest rates, some lenders may charge ongoing or upfront fees. It’s so important that prior to applying for a loan you understand all the ongoing costings.

3. Save a deposit

It’s always best to go to a lender with some form of deposit. Having a reasonable deposit for the car you are looking to purchase will limit your overall loan costs and interest repayments. It also shows the lender you have a history of saving an amount.

A good deposit for a car is between 10 and 20% of the purchase price.

4. Understand the costs

Before you start to look at the loans you will first need to understand all the costs associated with servicing the loan. You will need to calculate your weekly, fortnight or monthly repayments as well as any start up or ongoing fees. 

There are free loan calculators available online that give you an estimate of your weekly repayments based on information provided.

5. Get pre-approved

Before looking for a car you should consider applying for pre-approval. The benefit of pre-approval is it gives you a correct outline on how much you can borrow.

In conclusion,

Getting car finance can be a challenging experience. Before you consider applying for a car loan it is highly recommended that you cover the points mentioned above.

Shop for Cars has partnered connects you with over 40 lenders instantly through a single loan application. You can complete the entire process in under 10 minutes! The team will then offer you the best loan applications in the market. If you don’t like it you can walk away! Zero obligation.

Click here to find out more about Car Financing.

About Shop for Cars,

Shop for Cars is Australia’s first car dealership-only online classified. Shop for Cars brings you the best quality new and used vehicles from trusted motor dealers Australia wide. Shop for Cars currently has over 12,500 cars listed for sale all from licensed Motor Vehicle Dealers ONLY.

Click here to begin your search.

DISCLAIMER: This is all based on opinion please research and consult with all relevant parties to make the best buying decision.