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Car Finance

Top Tips for Buying Your First Car

Top Tips for Buying Your First Car
Discover the top tips for buying your first car.

There are many obvious tips out there for buying your first car. However, very few tell you about the tips for buying your first car that you actually need to know. Buying your first car is super exciting, but there is a lot to do beforehand. When you prepare yourself and plan ahead, the process is much easier. It can also help to ensure that you end up with the best car for you.

Bear in mind, it is one of the biggest investments we make in our lives with a lot at stake financially. There’s new cars, secondhand cars, dealerships, private sellers, and auctions houses out there to suit your every need. However, they can make your car buying journey even more confusing.

Why you need to know these tips for buying your first car
This article aims to help first-car buyers understand the process as best as possible. It will also outline the steps you need to take towards owning your first set of wheels. Here are some important tips for buying your first car to keep in mind while shopping.

1. Be honest with yourself

When looking for a new car, you must be honest with yourself. You need to figure out exactly what your car will be used for. Consider things such as:

• The weather where you live (hot, cold, rain, snow)
• Where you need to go (class, work, adventures)
• Your lifestyle
• The driving conditions

Then, it is a good idea to look at the features, options, and price of your desired car.

2. Budget and financing

Secondly, you need to take a very realistic look at your finances. This doesn’t only include the purchase price, but also the use and care of your future car. Consider things such as:

• Maintenance
• Insurance
• Gas
• Repairs
• Parking

Learn more about the maintenance and repair costs here. Then, you should look at your loan. A down payment usually isn’t required for your loan, but making one is often a good idea. Then, you won’t have to borrow as much, and your repayments will be lower. This is one of the best tips for buying your first car.

finance a car

3. Look at your options

Number three of these tips for buying your first car is very important. Shopping for your first car is easier for you than it used to be. The internet offers plenty of information a wealth of sellers near you. This means that you have far more options that are more likely to fall into your price range. You are also able to look at your options and narrow down your choices.

For new cars, you should ask multiple dealers for quotes on prices. For used cars, be sure to ask about the vehicle’s history including any accidents.

4. Know your credit score

Knowing your credit score is very important, not just for car loans, but for life in general. Your credit score will help to determine the interest rate you will pay on a car loan. If your credit score is good, you will be able to achieve a more favourable rate. This will then affect your overall budget.

Through your credit card provider, you will be able to get your credit score for free. Make sure you check your credit report before you want to buy to allow time to improve it if need be.

6. Test drive

Once you’ve settled on a few cars that suit your need and budget, take them for a test drive. This way, you can see how each one feels for you and performs in general. Try to drive them all on the same day so you can compare them with fresh eyes. It is always a good idea to call ahead and make appointments.

This will also help you gauge the way customers are treated at each dealership.

test drive

5. Apply for a loan

While it may seem weird to shop for a car loan before shopping for a car, it’s very useful. It allows you to gain an idea of how much you can borrow. On top of that, you also learn at what interest rate you can borrow. This means that you won’t have to make financial decisions while you’re at the dealership.

Don’t wait until the last minute, check out your car loan options now. This way, you can ensure that you’re getting the best rates possible.

7. Close the deal

The final, but also one of the most important tips for buying your first car is closing the deal. Once your research is done, you know what you want, and your financing is done, it is time to negotiate your deal. Remember that you’re in control. Then, you can focus on reading the contract carefully and closing the deal. Before you sign, make sure you understand the terms of any financing and warranty agreements.

buying your first car

Once you drive off, make sure you always make your car payments. That is the last step to the process. When you need help regarding your first car loan, contact the Australian Lending Centre. With fast, easy, and professional service, you can’t go wrong.

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Personal Loans Car Finance Refinance and Refinancing

What Is a Good Car Finance Rate?

what is a good car finance rate
Buying a new car is really exciting, but finding the right finance rate depends upon your individual circumstances.

Buying a new car is an extremely momentous and exciting occasion in your life. Whether it is your first car and a second-hand model, or your fifth car and you have opted for new off the shelf. The one thing that factors into both is being able to pay it off. Finding the right finance rate for your car is very subjective, and a lot of it has to do with your individual circumstances. So what is a good car finance rate?

Let’s take a look at this further.

What is car finance?

Having a car is almost a necessity in life for most people. From travelling to and from the office to dropping kids off at school and extracurricular activities, it can be hard to get by without them. In fact, some families even find they need two cars to make things work. The problem is, cars tend to gobble up money – fast.

If you don’t have enough savings to go out and buy a car (new or secondhand), taking out a car loan is a great option. It allows you to pay back the car in manageable instalments so you don’t feel the full hit of the purchase all at once.

Of course, it does come with a catch. Just like any other loan, you repay it with interest to the financial institution you borrowed from. So let us take a look at what is a good car finance rate?

excited buying new car

What is a good car finance rate?

As previously mentioned, this often depends on your individual circumstances. But there are a few key factors that need to be considered when taking out a car loan. All these factors help determine your finance rate and how much you end up paying in the long run:

Interest rate

This is, of course, one of the biggest components to factor in when weighing up a car loan. The interest rate is expressed as a per annum number. Before taking out a loan (any loan) you need to know what that interest rate is. Your credit score can affect how much interest you pay. If you have bad credit and have a history of not paying off loans, a traditional lender is unlikely to take a chance on you. You may have to look for a non-traditional lender who will offset the risk with a higher interest rate.

The loan period

This can be as short as three years or as long as five years. If you opt for a longer-term loan it means your repayments each month will be smaller. However, you end up paying more interest overall.

The repayments

In general, these are made monthly. However, you can always discuss with your lender if you would prefer to pay these off fortnightly or weekly instead. If you pay it off quicker, it can mean you will end up paying less interest in the long term.

Fees and charges

It is always important to look into other fees and charges that might be involved. These can add to the loan amount significantly.

Get the best car finance rate
There is a lot to consider before applying for car finance

How to get the best car finance rate?

Now that you know what is a good car finance rate and the factors that contribute to it, you can look at how to get the best rate for yourself.

You have a couple of options when it comes to taking out a loan:

  1. Take one out with the dealer: the finance rates are often higher with this option, but there is no planning required and it’s very convenient.
  2. Take one out with a bank or non-traditional lender: this option is less convenient, but often gives you the best rate. You are not relying on the dealer for both the price of the vehicle and the loan, so it takes away a bargaining chip.

The best way to get the best rate is to do your homework. Shop around and take a look at who is offering the lowest rates and whether the terms they set work for you.

What if I want to change my loan?

Firstly, it is important to determine whether refinancing your car is the right step for you. What exactly is it and what does it entail?

It essentially involves taking out a new loan to pay off your own loan. The main idea behind refinancing your car is to save you money in the process. If you manage to reduce your monthly repayments then it can free up that cash to be spent on other financial commitments.

There are four reasons you might look at refinancing your car:

  1. Lower monthly payment
  2. Lower interest rate
  3. Longer loan term
  4. Shorter loan term

If you are unhappy with your current situation and are looking into what is a good car finance rate, then this may be the best option for you.

Getting the right help

Whether you are in the stage of looking at different cars on the market and working out your finance options, or perhaps you bought a car recently (or not so recently) and are looking at changing your loan. It is always good to get a professional opinion. The team at Australian Lending Centre will look at your particular situation and offer the best advice based on your needs. Get in contact with us today.

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Personal Loans

Pros and Cons of Extended Car Loans

personal loans for bad credit

What is an extended car loan?

Most financial specialists indicate that an extended car loan is a loan whose duration exceeds 60 months. If you’re thinking about applying for an extended car loan, you should get acquainted with the pros and cons of this decision. For the most part, extending car loans might facilitate some financial relief – and this can seriously be life-changing to people struggling financially. However, what should you know on this topic?

For many, the most important consideration is, of course, the amount of the monthly payment. As a matter of fact, you should note that there are many lenders out there that advertise unbelievably low monthly repayments, as a strategy to attract more and more borrowers.

However, what one might fail to realise is that a low payment is usually the result of long loan duration or the requirement to provide a significant down payment. While facilitating a down payment for car loans is highly recommended to benefit from more favourable terms, it isn’t always a possibility. And this could leave the buyer with only one possibility at hand: which is extended car loans – this could be the only way in which one can manage to keep the monthly repayment amount under control.

Extended Car Loans – Pros

First and foremost, the main reason why so many Aussies prefer extended car loans is due to the low monthly payments. If you have other monthly repayments, for your mortgage or other personal loans, this could mean that you cannot cope with a high monthly payment for your car loan; this could significantly minimise your financial possibilities.

At the end of the day, you should pick the option that works best for your situation, even though this could mean extended loan terms. Failing to cope with your payments is the worst case scenario, and it can happen if you aren’t realistic regarding your budget and needs.

At the same time, it is critical to pick a vehicle that meets your budget. And this doesn’t refer exclusively to the upfront cost of the car – but to its upkeep costs as well, since these add up over the course of time, as well.

While some experts believe that extended car loans should be avoided at all costs, as long as you are aware of both the pros and cons, you’ll know what to expect.

Extended Loans – Cons

Now we’d like to move on to presenting the main cons to extended car loans. As a rule of thumb, the prolonged lifespan of the loan translates into higher interest rates. This is the main disadvantage. Unfortunately, if you were to assess how much money you have spent, you may be shocked.

Evidently, this applies to all sorts of financing whose loan terms are extended. This is why most people prefer higher repayments and shorter loan terms. That’s because, if you go the other way, you’ll end up paying much more than the car’s worth. And you’ll be paying much more in interest and additional costs.

It goes without saying that no one enjoys the thought of paying more than they should. Therefore, perhaps it would be a good idea to consider getting a more affordable car so that you can deal with the repayments.

Taking It All in

When you’re looking for car loans, it’s important to assess a few critical things. For one thing: do you really need a car? For most of us, a car is a necessary acquisition. Do you need a new car? or can you work with a used car? Ultimately, this might suit your financial situation best.

Additionally, you should do your research and look for the most convenient interest rates and loan terms. The offers provided by the lenders can vary a lot. At the end of the day, make sure you factor in the consequences and implications of applying for an extended car loan. In other words, taking out a new form of financing shouldn’t make coping with your debt unmanageable.

If anything, perhaps it would be a better idea to wait until your financial prospects improve and you’re likely to benefit from more favourable loan terms. Of course, this is a possibility only if you can postpone the purchase of the car.

When in doubt, you can always contact Australian Lending Centre – our team of specialists is eager to help you out and get back on track. We provide car loans, refinancing options, and, most importantly, we are willing to customise our offers to your needs.

Categories
Personal Loans Car Finance

How to Get A Classic Car Loan on a Budget

classic car loan

Collecting classic cars is one of the costliest hobbies around and it is a little trick to get a classical car loan. The price tag on such a baby is sure to cause a panic attack in many people. People found ways of getting a classic car loan despite having a normal budget that in certain circumstances would destroy their dreams of being at the wheel of a vintage beast. If you’re aiming at getting a classic loan but your budget is nothing out of the ordinary, you might find this guide very handy. Let’s take a look at the steps you have to take in order to get classic car loans on a tight budget.

Classic car loan Guidelines 

Consider private lenders 

Credit unions and banks are not a good source of car loans, especially when you juggle with a couple of loans already. And even if they offer you the car loan you require, it will probably have a huge interest rate and it will be secured on your house. Private lenders, on the other hand, have a wide variety of car loans that come with affordable interest rates. What’s more, many of them are willing to tailor repayment plans for their clients.

You can find a private lender pretty easily. Just surf the Internet for a while and you’ll definitely find one. Stay away from lenders who ask for deposits or any other sort of down payment.

Hire a broker for your classic car loan

One that specialises in car financing, to be more precise; if you can’t seem to find a good deal, no matter how hard you try, such a broker can do some research and get back to you with one.

Moreover, a car broker can easily save you some funding, as well as the hassle of doing all the research on your own. Brokers collaborate with a lot of lenders. Sometimes you don’t even have to pay the broker because he works on a commission. In other words, if he gets you the dream-deal, he’ll get a certain sum of money from the lender he hooked you up with. This is how you save money by hiring a car financing broker.

Leasing

Tons of classic car enthusiasts choose to lease vehicles and then purchase them. This works perfectly for those people who can’t afford to buy a classic car with a down payment or can’t find a lender that’s willing to hand them some dough. After leasing, you can purchase that vehicle outright and you’ll know for sure how efficient the car is and whether or not it’s as worth it as you thought it would be initially. This is the best alternative to car loans you have (and the safest, to be completely honest with you).

A HELOC 

A Home Equity Line of Credit could actually provide you with enough funds to purchase the classic car you’ve been dreaming about for so long. Of course, you have to own quite a large, modern house that has a lot of equity in it. As you might know, a HELOC is a loan that’s secured on your house, which serves as collateral. If you fail to repay the loan, the lender can place a lien on it and sell it. The HELOC, therefore, should be your last resort. The Home Equity Line of Credit usually serves other purposes, but it’s totally possible to get a car with the money that comes from it.

Secured or unsecured

You’ll have to determine if you want an unsecured loan or a secured one. Under a secured one, you’ll get more money and lower interest rates. Under unsecured car loans, you’ll get a more limited amount of money and higher interest rates. But then again, an unsecured loan doesn’t pose a threat to your assets. If you fail to repay it, the worst thing the lender can do is to sue you. Keep in mind that he can get the right to place a lien on your assets even in this circumstance.

Extra caution is therefore advised. You certainly don’t want to be living in a Cadillac, as cosy as it might be. Think twice or even thrice about this issue and make a decision you won’t live to regret after a while.

Concluding Remarks 

Classic car loans are a great way of finding the car you want to get but can’t afford to purchase outright. Australian Lending Centre can provide some really valuable advice when it comes to taking advantageous car loans, as well as the financial products themselves. Make an enquiry on the website and you’ll most definitely find a car loan that suits all your needs and comes with an affordable interest rate and a good repayment plan. We hope you’ll get to be at the wheel of that shiny, vintage car you’ve been dreaming about for years on end.

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Mortgage Financial Fitness Financial Planning Home Loans

Will My Car Loan Affect My Mortgage Application?

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A car loan can help you a lot if you plan to get your next car faster. However, a car loan can affect your mortgage application or other types of significant loans. If you are planning to buy an expensive car, this means that you will require a large loan. That car loan can impair your future borrowing power. But this doesn’t mean that you need to choose just one of these two.

Let’s see how a car loan can influence mortgage applications and how we can deal with such a situation.

First Things First

When you apply for a home loan, you will need to provide information regarding your financial status. This means that you will have to give documents regarding your monthly income, assets you own and other ongoing payments. This is how a lender will determine whether you can pay back the loan or not. Every lender wants to avoid doing business with people who might not be able to keep their word because of their financial problems. They want profit, not excuses.

If it were a personal loan, your mortgage application would be fine. But since we are talking about an expensive car loan, your mortgage application might get rejected due to your other massive loan. Either that or come with a lot of restrictions.

mortgage-application

Will My Car Loan Affect My Mortgage Application?

A car loan will have a high impact on your finances. Given all the taxes you need to pay, a car loan can take most of your monthly income. Still, aiming for a cheaper car might be of some help. Since cars tend to lose their value quite quickly, getting a very expensive one may not be a good idea, especially if you intend to apply for a mortgage.

Mortgage applications will act the same so that you will be left with little to no money. This is why a lender will probably have to refuse your mortgage application.

A lender wants to know that you will pay your mortgage and you won’t default on it. He will analyse your assets and other methods of income. If he sees that you have the financial power to afford a car loan and a mortgage at the same time, he might give you the green light. If not, it might be better for you if you only had one.

Defaulting on a mortgage is not a good sign for your lender and your finances. Car loans and home loans can quickly turn into uncontrollable debts, and you might end up losing everything. So don’t think of the lender as the bad guy, but be objective and calculate what you can and can’t afford, because in the end, if you are dishonest, you will suffer the most. Because banks and lenders make sure they never lose.

eligible-for-loan

Can I Still Be Eligible for a Mortgage Application?

Yes, you can. Your car loan will affect how much you can borrow, but if you don’t want an expensive house, that a limited amount of money can be just enough. If you can’t get the sum you need, you can search for an affordable home. When it comes to loans and money, flexibility is a must.

If you want to increase your chances of getting your mortgage application approved, then it’s time to clean a little bit of your credit file. Pay your debts and try to repair your bad credit. Also, consider debt consolidation as a possibility. Lenders will check your credit to find out who they are dealing with and also what other assets you own, just in case they might have to make up for that loan with something else rather than your money.

Having a savings account is a great idea. It makes you more trustworthy and responsible in the eyes of your lender. Let’s not forget that having some savings might help you quite a lot to reduce the amount you would apply for.

Also, try to talk to your lender. The more information he gets regarding your situation and income, the bigger the chance of getting your request approved. Don’t forget to tell him your exact plans.

suitable-car-loan

Final Thoughts

So, the short answer is that a car loan can influence mortgage applications and under certain circumstances, it can get your requests denied. But do not let yourself discouraged. Evaluate your possibilities, cut down on the unnecessary expenses and, if you can, try to pay ongoing debts before applying for a mortgage.

You can talk about these details with Australian Lending Centre. Our friendly consultants will tell you about your chances of receiving a loan and, if you fit our criteria, you may even get a good mortgage option. Advice never harmed anyone so you should not miss the chance of clarifying your options face to face with an expert.