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How to get approved for a car loan

Most car buyers normally think about the type of car they want to buy, then have a test drive at the dealership and then think about finance.

Unfortunately, this puts you in a weak bargaining position, and as such, you’re most likely not going to get the best deal on the car or your finance!

So, it’s worthwhile you speak to us first, obtain a pre-approval for a car loan and then go in search of your car.

 

Understand the costs of purchasing a car

Buying a car will normally cost you more than the price of the car itself. There are a number of hidden costs that you can easily overlook.

You should factor in the cost of stamp duty in your state and any transfer fees that might be applicable. It’s also a good idea to know what your insurance premiums will be and if you need to pay for other things like roadside assistance.

In addition, if you’re buying a second hand car, it’s a good idea to obtain an independent vehicle inspection to ensure the car is in sound working order.

 

Save up for the deposit

While it might be possible to get a car loan without a deposit, having a good deposit increases the likelihood of loan approval as it reduces the risk to the lender.

Having a savings history will demonstrate your ability to manage money, which will be viewed favourably by lenders.

 

Check your credit history

Most people have a credit score, so its a good idea to check what it is prior to applying for a loan. Also, before applying for the loan, try and avoid taking on any new debts as this will have a negative impact on your borrowing capacity.  And, always pay your bills and current debts on time.

If you’ve never borrowed money or had a credit card, you can start by opening a bank account and regularly depositing money. Even utility bills are a form of credit and by paying them on time will provide the lender some evidence that you know how to manage your money.

 

Obtain a pre-approval

When you have your deposit saved and ready for your new car, it’s a great idea to obtain a pre-approval. Please feel free to call us – we can compare your loan options and help you with a plan on how to best move forward.

We can give you a clear picture of how much you can spend and what type of car you can purchase.  We can even help you with finding the right car through our car search team.

We will also help you to understand the conditions that come with the loan, for example, there may be specific conditions around the age of the car or even the type of car.

There are a lot of car loan products out there and we are well positioned to talk you through all the differences and compare the best options for your personal circumstances.  Best of all, it’s a speedy and easy process!

 

If you would like to find out more about buying a car, investing in property,  or anything finance and/or property, the best place to start is to contact us for advice.   We are only an email or phone call away, on 02 8004 2222 or  book an appointment.

Although we are located in Crows Nest, we service clients from St Leonards, Artarmon, Wollstonecraft, Cammeray, Northbridge, Naremburn, Neutral Bay, Greenwich, North Sydney, Waverton to Willoughby and all areas of Greater Sydney.

PS  This article is prepared based on general information. It does not take into account individual financial or property objectives or needs and is not financial product or investment advice.