How To Finance Your First Car
Choosing A Spending Amount
If you are thinking about buying your first car, there are a few things that should consider about financing it. The first thing is to determine how much you want to spend on the car and how much you want to pay per month to own the car. You should keep in mind that cars cost more than they are advertised for. Not only is the advertised price the lowest the company can offer, but it doesn’t include any extras such as the better engine, the AC, and the colour that you want.
You will also have to pay dealer fees, interest rates, maintenance fees, fuel costs, and insurance for the car. Not to mention the stamp duty. The typical small car costs about $200 a week in running costs. You should compare what savings you have and what you want to spend each month on a loan in order to create a realistic budget. Get a loan with high interest payments and a large minimum repayment each month and you could find yourself in trouble. The goal is to get a car loan that you can afford.
When To Get A Loan
Since this is your first car loan, you should start the process before you shop for cars. This will ensure that you know how much you will be willing to spend and if there will be any problems in obtaining finance. Understand what kind of borrower you will be, a high risk or a low risk one. Find out and shop around for interest rates. You may choose to get a Conditional Approval before you do anything, as this will help you be sure that you will be approved.
Getting A Personal Loan
Once you have been approved for a loan, you will want to find out what the interest rates will be and if you have the ability to secure the loan. A personal loan allows you to borrow a lump sum and then pay it off in installments. If you can secure the loan by attaching it to some collateral, then your interest rates may be lower. A car loan is specific type of personal loan, where the car is secured against the loan. If you default on the repayments, then you lose the car. An unsecured loan has no collateral attached to it and will usually mean you will pay a higher interest rate.
Other things to be aware of when searching for a personal loan are the term limits. The shorter the limit, the higher the monthly payments will be. The longer the term, the less the monthly payments will be. Be sure to fully understand penalties and fees for late or missed payments before you jump into a loan. These penalties, fees, and interest rates can make getting back on track extremely hard and you don’t want to destroy your credit rating for the future.
Featured Personal Loans
| Personal Loan | Details | Min Interest Rate | Min Comparison Rate | Min Loan Amount | Min Loan Terms | Apply Fee | |
|---|---|---|---|---|---|---|---|
 ME Bank Personal Loan | A low rate personal loan from ME Bank with no application fee for a limited time. | 13.59% | 13.81% | $5000 | 1 year | $0 |   |
 Aussie Personal Loan | A smart way to consolidate your bills to save time and money so you can pay for your holiday, a wedding or renovate the house. | 13.90% | 14.84% | $3000 | 1 year | $199 | |
 Sugar Money Personal Loan | Fixed rate personal loan with flexible options to get you funds when you need it. | 13.99% | 15.00% | $3000 | 2 years | $250 | |
 bankmecu Personal Loan | A convenient and fast way to purchase a car or debt consolidation with affordable rates and fees. | 13.49% | 14.55% | $1000 | 1 year | $150 | |
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