NSW Car Finance
INTRODUCTION
When it comes to buying a car, the biggest challenge becomes choosing the mode of payment from the array of options available. You might want to take a look at the NSW Car Finance options available.
Here is a comprehensive guide on choosing the right option for yourself.
WHAT IS CAR FINANCE?
Car Finance is the financial assistance you can take for buying a car from a financial institution or a car dealership. It may be in the form of a loan, or a lease.
WHAT ARE THE DIFFERENT TYPES OF CAR FINANCE OPTIONS IN NEW SOUTH WALES?
Various types of car finance options are available in New South Wales. Basic knowledge of each of them might help you achieve your requirements.
The most common types of car finance include the following:
- HIRE PURCHASE (HP)- This basically means loaning a car with a down payment, followed by equal monthly payments (decided by the seller) as set in a signed agreement. After the end of the agreement, you have the following options-
- Make a payment of the residual amount and own the car. This amount is usually much lower than the actual cost of the car
- Return the car by Voluntary Termination (VT) after 50% of the total payable amount has been paid by you. Usually, there is no limit to the mileage you run on it or the nature of usage. But you have to make sure that the condition of the car should be the same as it was when you entered into the contract.
The monthly instalment is based on the price of the car. The user does not “own” the car until the final payment is made.
- PERSONAL CONTRACT PURCHASE (PCP)- Almost similar to a Hire Purchase, a PCP means you can either return the car at the end of the agreement without any additional values. Or, you can purchase it by paying the balloon payment of “Guaranteed Minimum Future Value” or GMFV. This GMFV is basically the depreciation cost of the car and is set during the initial agreement.
In PCP, the value of the car, interest rate (APR), and depreciation combined influence the monthly payment. Also, there is a limit on mileage and usage during the course of rent.
Just like in HP, here also, the user does not “own” the car until the entire payment is cleared.
- CAR LEASE- This is a flexible option wherein you can choose to rent a car for as long as you wish to, without the liability of having to buy it. You can lease either on a financial, operational, or novated lease. A third party may or may not be involved in it, depending upon which option you choose.
There is a range of options for leasing a car, depending upon your requirements or purpose of usage.
Read “Car Lease Sydney” on our page to know more.
- PERSONAL LOAN- You can obtain a personal loan from any financial institution to buy a car. However, the downsides of it include a loan value not exceeding 25000 dollars usually. You cannot verify the authenticity of the dealership you are buying the car from. Moreover, if you have a history of poor credit scores, you may not even be eligible to apply for a loan.
- GUARANTOR LOAN- Here, a third party (usually a family member), has to act as a guarantor for you to be able to take a loan. This happens when you have a poor credit score. If you fail to repay it back, the guarantor has to do it on your behalf. This is seen in very rare cases, as, finding a guarantor is a challenging task.
- FINANCE BROKERS- Many financial institutions, like Finance Brokers, NSW, offer various affordable schemes for you to make your dream of owning a car come true. We have a wide base of lenders in our circle and will compare all the rates for you. Thus, you will know which loan will be the most cost-effective for you. Contact us to know more.
- CHATTEL MORTGAGE- This type of finance option is available for businesses and business owners. It is also a type of rent, but, the car itself is mortgaged.
You are the owner of the car from Day one of the contract agreement.
The interest rate is low.
You make a down payment when the contract is signed. And after the tenure of monthly payments is over, you have to make a balloon payment to claim the car. This balloon payment is decided right at the beginning of the agreement and determines the monthly payment value you have to make. This balloon payment and monthly rent is inversely proportional to each other.
WHAT IS THE BEST WAY TO FINANCE A CAR IN AUSTRALIA?
The best way for YOU to finance a car in Australia depends TOTALLY upon your financial parameters (financial condition, financial budget, credit score, salary), and the purpose of your buying a car. Even the model or brand you choose to buy significantly determines the best finance option for you to buy a car.
If you are not much into financial planning or lack adequate financial knowledge, contact us. We have been providing financial solutions for over 36+ years now, and will definitely help you out with selecting the best car finance option for you.
WHAT IS THE MOST POPULAR CAR FINANCE?
Although the best car finance option varies with individuals, we clearly do have a winner most popular amongst the mass. A survey conducted by Whatcar showed that one-third of its respondents selected personal loans as their first choice of car finance. Closely following it was Personal Contract Purchase (PCP).
WHAT IS THE BEST CAR LOAN RATE IN AUSTRALIA?
According to the latest data, the average interest rate for a car loan is 5.97% for a new car and 6.58% for a used car. However, car loan rates are also dependent upon your property assets, credit score, hence, may vary accordingly.
Connect with our brokers having expertise in car finance prospects. They will help you compare your investment and return rates, for the different options. We have a clear vision to help you maximise your financial benefits. Hence, we will select the best prospect for you that will ensure that you achieve the highest gain from your investment.