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Serviceability
November 1, 2018
OUR SOLUTION to the Banks’ Warpath on Living Expenses
November 15, 2018

In the market for a new car?

Do you see car finance deals advertised at 0% interest rate and think “wow what a good deal!” I know before I started working in finance; that is exactly what I thought. Even now I try explaining it to my mates and they’re a bit on the fence about the whole thing. I just say to them “When you’re looking to buy a new car, let me know and I’ll see if I can beat whatever deal the dealership is giving you, both on the car and the finance!”

I’m saying the same to you too!!

Most people don’t realise it, but as Mortgage Brokers we are qualified to offer more than just home loans. We have access to asset and equipment finance which includes standard car loans, as well as loans for company asset purchases.

It is very easy for us to get a quote, so you can compare us against what is being offered by dealerships.

With car loans, the main thing to focus on isn’t so much the rate, but the “total monthly payment” which includes all the fees.

You might get a rate of 5% with a total monthly payment of $600. This might include a spread of additional fees, or they may have capitalized some big establishment fees into your loan.  Who knows!

You might get a loan for the same amount and the rate could be 6% yet the total monthly repayment is only $550! Sure, the rate is higher but at the end of the day does it matter if you end up saving money?!!

Also, car dealerships might offer you a cheap deal on finance but then offer you only a small discount on the purchase price of your car. Or, they might offer you a great deal on your car and then try pick up their lost margin in a crazily bad finance deal.

To tip the scales in your favour we do two separate offers, we offer a “car buying service” where our independent car agency partners call dealerships and negotiate on your behalf. They get better deals because they’re experts at what they do. The car is delivered to you, so you don’t even have to leave your house…. it even comes with a bow, so you can take all the photos you want!

I’ll give you a real example….

One of our clients came to us looking for a new car after we’d helped them with their mortgage.  They’d had test drives at the dealerships, so they knew exactly what they wanted… they even knew the colour! They were ready to buy.

Comparing the Car Purchase:

·        Dealership one = $61,990

·        Dealership two = $58,000

·        Our car buying agency = $56,678

·        …Exact same car…Exact same specs …but a massive $5,312 difference!!

Dealership Finance:

·        $58,000 + capitalised fees

·        5 year loan

·        30% balloon at the end ($17,400)

Quote = monthly repayment $900 x 60 = $54,000

 

Our package – car savings plus finance savings

Let’s be fair, the clients had already found the lower $58,000 deal, so we’ll just compare this with our offer:

·        The purchase price of the car through our car agency was only $56,678, so we saved them $1,332.

·        Which meant they only needed a loan for that amount, so the new monthly payment reduced to $857!

·        That is a saving of $2,580 over the 5 year loan term!  Saving $43 per month on the finance for me any way would be a win, I’d see it as halving my phone bill!

So… you get a car …at a cheaper monthly repayment… delivered with a bow ….direct to your door….and get some great service along the way!!

This is especially good if you’re not good at haggling!  I know this won’t be for everyone because some people enjoy the haggling!! If you’re one of these people have a go yourself, then come to us to see if we can better it. At least that way you can still have your fun 😊

 

If you have any questions, please feel free to contact me!!

adam@how-strategygroup.com.au

Phone – Direct 8922 9757

Adam Wilson

Loan Writer, HOW – Home Loans