Borrowing money to buy a car
If you don’t have the cash upfront to buy a car you mightdecide to get a car loan.
While you might bargain over the price of a car, it's alsoworth knowing that considerable savings can be made by shopping around for thecheapest possible car loan.
If you buy a car from a car yard, the car dealer might offerto arrange the finance for you. You don’t have to get the loan through the cardealer and it’s often cheaper to get a loan from somewhere else.
Banks, building societies, credit unions, and specialistlending and leasing companies also offer car loans.
Dealer finance may be more convenient in that you can sign upand drive away immediately. But you might end up paying thousands of dollarsmore than you need to or face restrictive terms and conditions on the loanyou've signed up for.
So it's worth shopping around to see what's on offer.
Choosing the best loan for you
- Compare the interest rates, fees and penalty charges imposed by different financiers: these are the key to the best deal.
- Do the finance shopping before you go to the car yard.
- Use as much of your own money as possible to reduce the overall cost of borrowing.
- Check the fine print of fixed-price service contracts before accepting them to see if they cover the costs of replacing wear-and-tear items such as brake pads or batteries.
Helpful tips from the Fido, Australian Securities andInvestment Commission
