When organising car finance, whether it’s for personal or business use, it is extremely important to do your research and consider all the options to ensure you get the best possible finance solution for you and your circumstances.
Before walking into your bank or going down to the local car dealership, make sure you read the points below to arm yourself with the knowledge you need to ensure you can negotiate a finance solution tailored specifically to your needs.
Tip 1. You don’t have to accept the dealership’s finance offer
Dealerships tend to only have accreditations with at most three finance companies, some of which you may never have heard of. At Credit One, we have accreditations which over 30 leading lenders and compare them on your behalf to get you the best finance rate for your circumstances – because we want your business and love happy clients.
Dealerships also use finance as a way to ‘control’ the purchase, since they know how much they can get you approved for and therefore don’t have to negotiate on the vehicle price. You may find that you lose your bargaining power if you choose to obtain finance through the dealership.
Tip 2. Interest rate is important, but make sure you compare all aspects of the loan
Interest rates are an important thing to consider when comparing finance options, however you need to consider other aspects that can have a much bigger impact on the total amount you pay over the life of your loan.
Another important aspect to consider when comparing finance options are fees. Does the finance company charge monthly account fees, account finalisation fees or early payout fees? As a general rule, finance companies who offer lower interest rates, generally have higher early payout fees and often have monthly account fees to offset the discount in interest rate.
Rather than comparing the interest rates, consider comparing the actual weekly or monthly repayment instead. This will give you a much more accurate comparison since the repayments include fees and charges.
Tip 3. Limit the Number of Finance Applications You Make
Every time you make an application for finance, apply for a mobile phone service on a contract or commence a utility account (e.g. Electricity, Gas or Water), an enquiry is made on your Equifax Credit Report. A finance company will look at the number of enquiries you have on your credit report and having too many enquiries will have a negative effect on your application for finance.
When you contact a finance company or walk into a dealership, their priority will be to secure your finance application. Make sure you give yourself the best chance at securing a competitive interest rate on your finance by limiting the number of places you allow to submit an application for finance on your behalf.
An option to consider to reduce the number of enquiries on your Equifax Credit Report while ensuring you get a competitive interest rate is to use the services of a finance broker. Credit One is a finance brokering firm and we have accreditations with over 30 leading Australian finance companies. We compare them on your behalf to find the finance company who’s willing to give you the best deal for your circumstances. This helps to limit the enquiries on your credit report, while saving you time and money by comparing multiple lenders to secure a competitive finance solution.
Tip 4. Know Your Equifax Credit File
Equifax allows you to access a Free Copy of your Credit Report online once a year. Prior to applying for finance, obtain a copy of your Equifax Credit Report so you know whether you are likely to encounter any issues. If you find something listed on your credit report that you believe is incorrect, contact the company who listed the default directly to discuss your options. If it was placed on your file in error, they may be able to remove it or you may be able to negotiate a solution with them directly.
Tip 5. Research and Apply Directly vs. Engaging the Services of a Broker
While it is possible after conducting thorough research to contact some finance companies and banks and apply for finance directly. You can’t be sure that you’ll meet their lending criteria or whether they are offering you a competitive finance solution.
Credit One have spent years establishing relationships with our finance companies and currently have accreditations with 33 leading lenders. This gives us the unique opportunity to ‘paint a picture’ to the lender on your behalf, explain your circumstances and why you deserve a great rate.
Credit One Finance Brokers have the unique advantage of having a thorough understanding of each and every one of our lender’s individual guidelines. It is their job to ensure they stay up-to-date with any guideline changes or policy updates as well as hunting around for the lowest industry interest rates currently available. This unique knowledge enables us to effectively compare finance solutions for you to secure the right solution for your individual requirements.
Why spend your valuable time and money, potentially damage your Equifax Credit Report making multiple applications or risk being stuck with a second-rate finance solution when you can simply contact Credit One. Our friendly staff are conveniently available 7 days a week, simply give us a call on 1300 CREDIT (1300 273 348) or complete your car finance application online in 4 easy steps.
Or Phone Us on 1300 CREDIT (1300 273 348) for an obligation-free quote
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