Getting a car loan is probably the second biggest financial decision that you will ever make. In fact the majority of people that are considering buying a car today, whether they’re after a brand new car from a dealership, or a second hand car from a private seller, are likely to need to get a car loan in order to pay for it and drive it home.
We have put together a quick 5 step guide to obtaining car finance at the best rates. So before you apply down at your local dealership for a car loan, please consider the following points before submitting an application.
- Don’t Just Apply Everywhere
Technology has made it so easy to apply for a car loan online without even leaving your home or office. Sometimes people don’t even realise they are actually applying for a loan rather than just enquiring about a car loan online. Applying for a car loan with too many financiers can greatly affect your chances of being approved by any lender. Credit reporting agencies can now make note every time a financial institution checks your credit history. If you’ve applied for multiple car loans recently, financiers are likely to consider you to be a high risk and decline your application.
You can obtain a copy of your credit report to see what information it holds about you and also to see what the financiers can see. In the meantime, only make an application for a loan once you are happy that your chosen financier is going to offer a competitive car finance rate. We can’t stress this enough, the worst thing you can do is to make multiple applications at one time. Read more about knowing your credit file intimately and why it’s important to your financial future.
- Pre-Approved Car Loans
If you’re looking to head out to buy a car from a local dealer, it’s wise to apply for your car loan pre-approval before you set foot in the dealership. Having your money pre-approved ready to go can increase your bargaining power at the sales desk. Also, this way you can look at more options than just the one option that a car dealership will generally have to offer you. We all know that if you only have one option to choose from it is very difficult to know if you are getting the very best car loan deal.
- Look at Buying a Newer Vehicle
It’s true, new car loans can sometimes be easier to get that approval that you are looking for over a used car loan. If the repayments for a new car fit within your budget then it may work in your favour to get a better overall car loan deal and walk away with manufacturer warranty for years to come. Finance companies see older vehicles as harder to sell if things go bad and as such mark them as a higher risk. You can still have your car loan approved for an older car, but history tells us that it can be a lot easier to get approved for a brand new car.
- Have Your Paperwork in Order
You can certainly have an influence on the turnaround time for your car loan approval and help your chances of getting your loan settled fast. There are some items that you can get together and have ready for when you make your application that will speed up the process for you. Having your pay slips, ID and knowing your last 3 years employment and residential history will be a great head start. If you can show you have regular employment and have the capacity to save money you will be highly regarded by most financiers.
- Read the Fine Print Carefully
This one may come as no surprise to you, but it surprises us how many times we speak with clients that don’t know a lot about their current loans. As consumers we get swept up in the emotion of driving away with a new car that the fine print gets overlooked. Not all financiers are the same, and as such this also means that not all banks are the same. This is why it’s very important to speak with someone that can help you compare your car loan options to ensure you are getting the very best deal on the market today. Financier’s appetites for deals change every month, so it is important that you speak with someone that has their finger on the pulse.
It’s never wise to rush into any long term financial commitments without taking the time to speak with someone that can give you obligation free advice about all of the possible car loan options. If you are patient and do your homework, you could secure yourself a better car loan than you originally thought possible.
You can apply for a car loan online in 3 simple steps or speak with one of our car loan specialists on 1300 769 177 today to get your car loan pre-approval set up.