If a new car or at least a vehicle that is new to you is on your list of things that you need to purchase then it can be difficult deciding whether or not to pay for the vehicle in one lump sum or to spread out the costs over a number of years. We all have different financial circumstances so you will have a better idea of where you stand financially and which one is best for you. If you do have a lump sum of money that you could hand over the counter to pay for your car all at once then maybe you need to stop for a moment and think if this money could be used better elsewhere.
Many people in Australia are thinking exactly like this and so this is why they end up taking out affordable car loans all across Australia every single day. If you’re not sure if a car loan is right for you at this moment then you should know that it comes with a number of different features and benefits as well. A car loan is quite unique in itself and so the following are some of the features and benefits that will allow you to make a better financial decision.
- You will pay less interest – The fact that your car will be used as security for the loan means that you can take advantage of really low-interest rates. It is not unknown for some car dealers to offer nought per cent finance over a number of months as long as you can put down a lump sum deposit. As long as you keep up with the payments and you pay in full every single month then you pay absolutely no interest. In most cases, however, you will pay some interest but it will be much lower than you think.
- It is a very fast process – You can actually go on to a car lot in Australia and drive off that same afternoon with your brand-new car. Car dealers know and understand that consumers are incredibly busy and so they have made the whole process easier and much quicker. Many require only the bare minimum of eligibility and very little documentation.
- There is no collateral required – As with many other loans, you usually have to put something up as collateral in case you are unable to pay back the money in full. This is not the case because the car that you’re buying is the security and so as long as you keep up the payments then you won’t run into any problems at all.
You can decide how long you want to pay back the money and some car loans will allow you to extend it for up to 5 to 7 years. This means that you are more in control of your finances and so you are not putting yourself in any financial pressure at any time to pay it back. You get to keep your savings in the bank account creating interest and this can still be your money for a rainy day.