Buying a car, whether it’s new or used is something to get excited about. But in our eagerness to find the perfect car it’s all too easy to forget about one small detail; how exactly we’re going to pay for that new set of wheels? Show
Luckily, for those of us that don’t walk around with an extra $20k in our back pockets, there are options; choose dealer finance or go out and secure a car loan from a broker (like us!) or the bank. Both have their advantages and disadvantages but which should you opt for? What’s the difference between dealer & car finance?Dealer finance is when the dealer contacts their preferred bank or financier and helps you arrange a loan for the car via them. They make all the arrangements while you do very little. Sounds ideal doesn't it? A car loan is when the buyer (that’s you!) applies for a loan with a broker like us, or direct from the bank, credit union, or a finance company. You arrange all the details of the loan yourself. You then use the money to purchase the car from the dealer for cash. The common feature between both dealer finance and a car loan (regardless of whether it's via a broker or not) is that all loans will have similar components you need to compare; the interest rate, the comparison rate, the term and the repayments. It's important to consider and compare your options. To help you with this process, we've make it easy to compare our interest rates to the Big4. Why would you opt for dealer finance?It’s an all too familiar situation. A buyer picks a car, goes over all the details, then has an ‘oh I forgot about that’ moment when the dealer asks if they’ll need to finance the car. And for this reason, so many buyers simply go with the flow and opt for dealer finance. But that’s not the only reason why finance might seem like a good option. The benefits of dealer finance
However, these benefits come at a price. The drawbacks of dealer finance
Why would you opt for a car loan (and a broker!)Like we said earlier, a car loan means that you are the one that makes contact with the broker, the bank or finance company. And while this may seem like an extremely time-consuming exercise it can pay off in the long run. The Benefits of a car loan
To learn more about the benefits of a broker, we've put together a helpful guide. The drawbacks of a car loanWe’ll be perfectly honest, there aren’t that many. In fact, we can only think of one.
So which is the best option?Of course everyone has their personal preference, but we have to say that applying for a car loan via a broker or off your own bat looks like the far better option here. You get better interest rates which means lower repayments, and you get tons of negotiating power to help you hammer out a better deal. Yes, there is that issue of inconvenience, but if getting on the phone is a major concern or if you have clam up like a shell when it’s time to talk money then you have other options. Calling banks and lenders is our thing! Let us do the heavy lifting for you At Stratton Finance, we do all the legwork, so you don’t have to. So if you’re in the market for a new or used car and have decided that a car loan is your best option, give us a call on 1300 STRATTON (1300 787 288), or get an online quote and we’ll have you approved for a loan and on the road in no time. What should you not say to a car salesman?5 Things to Never Tell a Car Salesman If You Want the Best Deal. 'I love this car. ' ... . 'I'm a doctor at University Hospital. ' ... . 'I'm looking for monthly payments of no more than $300. ' ... . 'How much will I get for my trade-in? ' ... . 'I'll be paying with cash,' or 'I've already secured financing. '. What is a good APR for a car?An auto loan's interest rate will depend largely on your credit score. Those with a credit score between 781 and 850 saw an average new car interest rate of 2.4% in the first quarter of 2022. Meanwhile, borrowers with scores in the lowest range (300 to 500) saw average rates of 14.76%.
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