Tips When Borrowing Money To Finance A Car

As soon as your new or used vehicle rolls out of the car yard, it will generally go down in value. When borrowing money to finance a car you should look at all the options available and make sure you are making the correct decision for you, your financial position and any dependants you may have. Your goal should be to secure low rate car finance so you are able to meet your repayments comfortably.

Before you set foot out the door, make sure you know your budget! You don’t want to get too excited and impulse buy something that will throw you in more debt than you can afford. If you can keep your repayments around 20% of your disposable income you’ll have secured the best car finance NZ for your personal situation.

The first thing to calculate is your weekly, fortnightly or monthly repayments. Can you afford them? If you had an unexpected bill one month, could you still afford your car repayment?

The second thing to shop around for is low rate car finance. Get quotes from different local providers and compare the rates to see which one offers the best car finance NZ. If you do choose a provider who offers low rate car finance, always check the fine print for any fees and/or charges for late payments etc. If you missed a payment, what happens? And third, compare the fees and charges on all your options to get a clear picture of what you are getting yourself into once signed up. Are there fees for paying the loan off early? Are there establishment fees?

Lenders are required by law to provide a disclosure statement. Ask for the disclosure statement and review it. It will give you answers to most of the above – Fees and charges, what happens if you can’t make payments, the interest rate and how interest is calculated. These are all important things to investigate when considering the best car finance NZ.

What Is The Best Car Finance NZ or Low Rate Car Finance?

The best car finance NZ is when you secure low rate car finance. So you would enter an agreement with a car finance provider which is repaid at a very low interest rate saving you money over the period of the repayment schedule.

As mentioned above, there are many factors which will determine what your rate will be and whether you can secure the best car finance NZ. Here’s a few factors car finance companies take into account when considering your car finance interest rate:

1. Your credit history. The basic rule here is the better your credit history, the better your finance rate can be. You are more likely to secure low interest car finance If you have one or two marks on your credit score, don’t be too concerned, all is not lost! You can secure low interest car finance, just not the cheapest available. You may need a secured loan as well, which is where if you do not make your repayments your vehicle can be taken to cover repayment costs.

2. Deposit. The deposit amount to put down when you first take your car will also be a factor in your finance rate. The more you pay up front the less risk there is for the lender so they may be inclined to offer you the best car finance NZ.

3. Income. Your income will be a factor in deciding your interest rate. If you have a higher, steady income and your outgoing expenses are reasonable enough so you have plenty of spare cash each week you’ll be looked at as lower risk and would be more likely to secure low rate car finance.

How Can I Secure The Best Car Finance NZ?

There are ways you can secure the best car finance NZ, you just need to understand all the above factors mentioned in what determines your car finance interest rate.

Once you know your personal situation and what factors may not help you in securing low rate car finance the best thing to do is to work on any areas that may hinder you eg; Obtain a higher paying job or additional job, purchase 1 or 2 small items on a repayment plan to give yourself a better repayment history, save more money so you have a larger deposit to put down.

These will take time so be patient and don’t rush into something that will cost you hundreds or thousands of additional dollars over the years of your finance.

How Do Car Finance Rates And Repayments Work?

To put it simply, lets say you go to a local car yard, looking for low interest car finance. You see a car that is worth $30,000 and you decide to buy it.

If you need to finance the vehicle, will you pay $30,000? No!.

Lets say you have an 8% Finance Rate, and to keep the calculation simple you don’t need to pay a deposit.

Car Loan: $30,000
Loan Duration: 4 years
Interest Rate: 8%
Car Loan: $30,000

Car Loan Monthly Payment: $732
Total Interest: $5,155
Total Cost: $35,155

So your $30,000 car bumps up to $35.155. You’ll pay an additional $5,155 for your vehicle! This is why it is so important to do your research and try to secure the best car finance NZ you can.

Ratings For Simplify Car Finance