Owning a car has not become a luxury, but a necessity. According to the Australian Bureau of Statistics, Motor Vehicle Census (MVC) in 2014 reached to a whopping 17.6 million vehicles registered in Australia which is 2.6% higher than the number of registrations for 2013 and an increase of 12.5% since 2009 with an average annual growth rate of 2.5% over 5 years. Given those numbers, various companies are taking advantage of this escalating trend wherein car loans and car financing options are almost limitless.

You may see advertisements around offering low interest rates with regards to car finance, from anything lower than 4% all the way down to 0%. It is definitely worth digging a bit deeper to ensure you really are getting the best deal.

Purchasing cars are not cheap and often people are not well equipped with the relevant information they need to deal with these problems. Looking at it, what really happens with a low interest finance deal is that a large slice of the profit margin on the new car just becomes the interest payable to the financier. This means that when a dealer offers you a low percentage on interest, the first thing that can be overlooked by the buyer is a possible discount on the purchase price of a vehicle.

Seeking advice from independent consultants can provide required assistance especially in getting better deals on interest rates. Mathematically, low interest rates are almost the same as haggling a 10% discount on the actual price of the car. If you can negotiate 15% off the price and obtain 7% interest loan independently or even 10% off the price and find finance at 6% you would be getting a far better deal.

Click here to further explore your options and take a look at an example on how low interest rates might not be the best option when it comes to car finance.

In reality if you think about it, if such an offer as very low rates were indeed true, somebody is losing a lot of money or earning a few. A tip would be to check the price of the car you are about to acquire and see whether you can negotiate a discounted price. If you tell the dealer you are not too interested in their low rates, you are likely to negotiate a good deal on the sale price.  This cheaper vehicle financed at a normal or fleet interest rate can save you some cash in the long run.   It is advisable to seek independent advice from a finance broker that will be able to assist you in finding a more flexible loan suitable to your needs.

Click here for more tips on car finance.

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