How to Save Money on Your Car Finance Loan in 2022

With rates rising and inflation surging, staying on top your finances has never been more important. That brings us to the question, how can motorists save money on their car finance loans in 2022?

Shop for Cars has put together 5 ways you can save money on your car finance loan in 2022.

Let’s get into it.

1. Improve Your Credit Score

We all know how important credit score is when applying for a car loan, but it is even more important if you want to save on your current loan. As rates continue to rise the only way you are going to save money on your Car finance loan is to move to the cheapest provider, and yes, they are still out there.

When it comes to sourcing a cheaper rate from another lender the first thing that they are going to look at is your credit score, current loan amount, and serviceability. If your credit score is poor or you have missed payments on your current loan, it may be difficult to move elsewhere for greater savings.

Before you begin seeking cheaper loan options it is so important that you assess your credit score and make the relevant improvements. The better your credit score is the more you may be able to save with another lender.

2. Shop Around

The only way that you are going to save money on Car finance in 2022 is by shopping around. If you sit on your current loan throughout the interest rate rises and surging inflation you could risk paying well more than you could.

For Motorists with a current car finance loan, it is important that you start researching what other providers may be offering. There are a vast number of lenders available in the Australian market and some providers are still offering low rates that the major providers are not.

Before you consider switching to another lender it is important that you understand what you are switching to, understand the terms and conditions and consult with all relevant parties to make the best lending decision.

3. Re-finance your current Finance Loan

Once you have found a cheaper provider that you may be interested in switching to, reach out to them and find out their requirements for re-financing your loan with them. This process may take a few weeks depending on the lender but refinancing to a better rate can and will save you thousands in repayments in the long run.

4. Consider Changing from Monthly Repayments to Fortnightly

When it comes to saving money on a loan it pays to change from monthly repayments to fortnightly. The benefit of paying fortnightly (if possible) is you are paying more of the principal down than you would on a monthly option. The quicker your principal payment gets paid off the less you have to pay in the long run.

Before you consider switching from a monthly repayment schedule to a fortnightly schedule it is important that you understand how a fortnightly payment schedule will impact your everyday financial situation.

5. Make More Repayments if Possible

This one may not be for everyone, but for those of you who do have the means to, it is always best to pay as much as possible as often as possible. Like mentioned in the previous point, the quicker you pay off your loan principal the less you have to pay in interest. Your aim is to pay off the loan as quickly as you possibly can, the last thing you want is to keep the loan ticking away with all the current interest rates rising.

Final Word,

Reducing your expenses has never been more important than now. Car finance is one of the biggest financial commitments for most of Australians and there are ways to minimise the amounts you are paying. The 5 tips mentioned above are a few ways you can save money on car finance in 2022.

We hope you enjoyed reading this article. To read more articles like this, please visit the Shop for Cars latest news page here.

About Shop for Cars,

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