Buying a car isn’t as simple as strolling into a dealership and driving home with a new set of wheels. It’s a decision that affects almost every facet of our lives, and should never be taken lightly. The following guide will walk through the “what now?” most of us experience when we know we need to purchase a vehicle.
The simplest method for setting your car budget is to determine what your income and expenses are. Ensure you base your income on the money you take home after taxes. From here, you’ll have to determine what repayments you can afford, and most importantly, what you want to spend on a new car.
Your budget will be dictated by your personal circumstances and expenses. Ensure you take a thorough look at all of the money coming in and out of your bank account every month before stepping into a dealership or making an enquiry on a vehicle online.
Hot tip: when calculating your car loan repayments or business car loan interest rates, be sure to factor in insurance costs if they aren’t included in your overall spend.
Car purchases are not to be taken lightly, avoid putting yourself in a tough financial position due to poor preparation.
Maintaining a healthy credit rating can go a long way in the car loan approval process. Here are some quick tips on how to improve your credit rating:
A record of consistent and timely payments will substantially assist in improving your credit rating.
A lender or financer may not look kindly your file if you have multiple recent credit inquiries or any inquiries from payday lenders.
The sooner you can free yourself of any outstanding debts or loans, the sooner they will disappear from your credit checks.
This one is a no-brainer; the lower your credit card balance is (consistently), the higher your credit rating will be.
Sometimes, the old fashioned rules are often the best ones. The 20/4/10 Rule dictates that you should make a down-payment (capital investment) of at least 20% of a vehicle’s price, secure a loan that is no longer than 4 years in duration and spend no more than 10% of your gross income on insurance.
Whilst this rule may not be applicable to every person and every situation, it can be a helpful guide when budgeting for your purchase.
Now that we’ve discussed all the things to consider on the lead up to your car loan, it’s time we examined the car loan process itself. The car loan process can be incredibly daunting but it’s nothing a step-by-step guide can’t help you with.
A valid driver’s licence will be required to verify your identity.
Lenders will need to know you can handle the payments when you are granted the loan, so be sure to have pay slips at the ready.
Another step in the identity verification process, the lender will need to know you live at the address listed on your driver’s licence.
You can never ask enough questions, especially when something as important as car loan is at stake. Some key questions to ask your car loan lender are:
At this stage, we should be across what our budget is, and whether or not we think we’ll be purchasing a car or leasing one. With the hundreds upon hundreds of cars available on the market, how do you know what car is right for you? Here are some questions you should ask to help narrow down your search.
Visiting a dealership and negotiating with a salesman is an experience most people dread. Once you’ve decided on your preferred car model, car-buying services use certified representatives to act on your behalf.
AutoCarLoans offer a free car buying service which can help you get a great price on a new vehicle. You can call us on 1300 301 051 to arrange this.
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Negotiating on the price of a car can certainly feel like a chess match. To ensure you’re two steps ahead of the salesman, and not the other way around, here are some key things to consider:
Adding a four-wheeled member to the family is always an exciting time in anyone’s life. As long as we’re fully prepared for it, it will certainly be a joyous one. If require some more personalised advice or some help from our free car buying service, the team at Auto Car Loans are here to help. Feel free to give us a call on 1300 301 051 or reach out at any time at [email protected].
DISCLAIMER: The thoughts and opinions conveyed on this website are those of the authors only and are of a general nature. This does not constitute financial or general advice to you from Auto Loans Group. You should seek your own independent advice from a professional which is specific to your circumstances before considering any of the items referred to in this article, including finance, insurance, and car buying.
Helpful links: Business car loans, Business car loan requirements.