Car Finance Guide

This Car Finance Guide has been developed to help you find the best car loans and car loan finance available. Not all car finance options will work for your situation, so it’s important that you understand what’s available and how to get the best deal. At Australian Credit and Finance, we have car finance experts ready to help you with all your car loan needs.

If you don’t do the right research before you buy your car, you could end up paying inflated prices for a mid-range car.

We understand that for most people, car finance is boring. Most people would rather just get it done than spend the time looking at options and working out what works best for their situation. If you fall into this category of car buyer, then you should speak with one of our team members on 1300 735 557. They can do all the research for you and present you with a couple of options. All you have to do is choose.


What can you afford?


If you’d like to manage the process yourself, start with figuring out how much you can afford. Our car finance calculator will provide you with some ideas around how much you can expect to pay in interest and how much your monthly repayments might be.

Once you’ve got an idea of your budget, it’s time to look at a few different options when it comes to car finance.


Types of Car Loans


We can help you with the following types of car loans:

  1. Bad credit car loans – if you have hit a few curve balls and ended up with a bad credit rating, we can still help you access a car loan, particularly if you can show that you’ve made steps to improve your current financial situation.
  2. Car leasing – if you are looking for an option that doesn’t require a lump sum payment upfront, then car leasing might be a good option for you. This is ideally suited to small business owners or companies.
  3. General car loans – if you have a great credit history and are ready to buy a car, this is the type of loan we can arrange for you. We’ll get you the best deal and the lowest interest rate to suit your needs.


Other Car Loan Options


While the above car finance options are fairly easy to access, they might not suit your needs. There are a number of other options available to you.

  1. Mortgage Redraw: If you have the ability to withdraw funds from your mortgage, this could be the cheapest finance option for you. If you have an offset loan or redraw facility, this could work for you. But this comes with a warning. If you do redraw, you need to be aware that you’ll be paying interest on that amount over the term of your loan, which could have 20 years still left to go. You can offset this by increasing your monthly repayments or making a lump sum payment. This is best suited for people who ‘save’ into their mortgage. Don’t take this option if you can’t offset the amount you withdraw.
  2. Dealer Finance: If you’re buying a new car, dealer finance could be a good option for you. In most cases it’s ‘easy finance’ and you can drive away that day once you’ve signed the dotted line. A word of caution though. Dealer finance is often more costly over the long term. Make sure you compare interest rates and read the fine print to understand the fees. This is a good option if you can negotiate well.
  3. Factory Finance: Similar to dealer finance, Factory Finance is launched by the maker of the car and can often provide excellent interest rates. This is a good option for you if you don’t care about the type of model of car you buy and if you’re prepared to pay a lump sum payment at the end of the finance period. Generally, the models available via Factory Finance are limited as well. So make sure you complete your research first.

There are definitely a variety of options available to you when you’re looking at car finance. Not only do you have to decide on the type of car you want to buy, but you need to make sure that the type of finance you get will meet your needs.


The True Cost of Finance


Let’s look at some examples of what different types of car finance might cost you. The following examples are based on borrowing $30,000 over a five year period.

Finance Option Average Rate P.A. Interest Period Total Cost
Factory Finance 2.90% $2,263.72 $32,263.72
Car Loan 10.35% $8,555.40 $38,555.40
Dealer Finance 12.95% $10,909.47 $40,909.47
Mortgage Redraw (20 years) 7.20% 26,689.15 $56,689.15

Figuring out what you can afford is key to making sure you get the right car finance option.

Car finance can be difficult to navigate, it’s true. Finding the best car loans and car loan finance to meet you needs can be overwhelming. Speak to your experienced team of experts today on 1300 735 557 to get your car finance needs sorted without the fuss.