Here is a handy car loan report and checklist to help you avoid nasty car loan breakdowns. Let’s get straight to it and take a look under the bonnet of a car loan to see what you might be getting into.
Here is a list of inspection items for you to think about.
Upfront Fees and Ongoing Fees
- Establishment Fee – this is a fee that goes straight to the financier as a fee for letting them set the loan up for you.
- Origination Fee – this is a fee that is charged by Dealerships that you can negotiate on.
- Ongoing Fees – an example of this could be monthly account keeping fees. Always ask if there are any ongoing account keeping fees on top of the quoted weekly repayment as these can add up over time.
Interest Rate vs Comparison Rate
- A higher Comparison Rate indicates to you that there are higher fees and charges.
- Set Term – locking you in on set terms can sometimes mean that you will pay more in the long run, ensure you ask about early payout fees and charges before you lock in a term.
- Balloon Payment at the end can make the initial deal look more attractive but you will still be required to pay out the amount of the balloon payment at the end of term and this could amount to thousands of dollars.
Hidden Fees and Costs
- Early Payout Fee – most dealerships charge for every month you pay short of the full term but this will vary between loan providers so it’s important to ask upfront.
- Higher Repayment Fees – check to see if you get penalised for making extra repayments.
- Guarantor Fee – if the loan allows for a guarantor then you might find that there are extra charges for the privilege.
- Document Request Fees – if you require additional paperwork copies, like a copy of your contract or you request an additional loan statement throughout the term of your loan, you may have to pay fees to receive these.
Flexibility and Convenience
- Can you suspend payments if you are ahead of repayments?
- Can you easily set up direct debits or can you make payments in a convenient way?
- Can you choose the term of your loan or are you restricted to only a short term loan?
- How will you manage your loan? A dealership financing department probably won’t offer you any service after the loan settles, their job is done.
- Can you apply online and have your answer back the same day?
Other Things to Consider
- Is the repayment quoted to you inclusive of the dealership extras like pre-delivery fee, tinting, dealership warranty, tow bars etc.
- Do your homework. Understand what the car is really worth and what the extras will do to the price of your car. Ask yourself, do they add value or not?
- Shop around and get the best deal, don’t accept first price given to you.
- Ask yourself, how will I meet my car loan repayments if I become unwell, have an accident and become disabled, or I am made redundant? Consumer Credit Insurance may be a loan benefit worth considering.
Before you jump into your next car loan, speak with someone who is qualified to give you a non-bias up to date view on a variety of loan options. The dealership and indeed a bank will generally only have one car loan option to offer you. The experienced car loan specialists that we have working at Ask4Finance have a panel of lenders that they deal with every day to make sure that our customers are getting the very best car loan solution on the market today. It’s our job to stay ahead of the game and to know which lender is hungry to give you the best deal. Apply online in only a few minutes or call and speak with one of our car loan specialists today on 1300 769 177.