Now that you found your perfect car, it is time to look around for the best options.
Your dealer may offer you financing but you are free to look for other means to pay for by looking at offers from banks, credit unions and other financial institutions – look not just for the cheapest but also for the one with the most flexible terms.
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Make sure you fully understand the terms of the loan. You do not want to be too strained just because you did not take into account the interest rate and the length of time you need to pay for the loan. New cars can be more expensive so really study your budget and know just how much you can borrow.
You can google car loans available in NSW. There are even websites that can help you compare rates and features of several popular financial institutions that offer loans.
You can check:
It is also best to call the provider/s to make sure that all details in the websites are accurate, updated and applicable to your circumstance.
This is called a balloon repayment because it lets you pay a smaller amount for your monthly installment but your last payment is larger to pay off the debt.
You may be offered a guaranteed buy-back price in your vehicle if you opt for balloon repayment but make sure to know about all the conditions before signing anything.
You can get a car for lease. This may be best for those who always trade-in their car. Leasing a car literally means you are renting the vehicle so at the end of the term, the car does not belong to you but still belongs to the lender.
You can end the lease earlier than what is in the contract but you should be aware of the consequences of it.
Also be aware of all the terms of the lease. Know that during your lease you are responsible for making the rent fee plus the car’s running and maintenance costs.
If in you find yourself having a hard time repaying for your car because you are experiencing a difficult time, do not worry.
Varying Credit Contract
The law allows for a “variation in a credit contract.” If you are having some hardship caused by unemployment or illness but you expect that you can pay if the fee amount is altered and your current situation will improve.
If you can prove all the above statements, contact your lender and come to an arrangement. You may receive a reduction in payments and term extension or payment postponement for a period of time or a combination of both.
Once you agreed on new terms with your lending body, make sure you have the new arrangement terms on paper.
For those having problems with your lender, you can report your complaint or dispute to the Credit and Debt Hotline at 1800 007 007. “The Credit and Debit Hotline is an independent and confidential advice and advocacy service for credit and debt matters.”
Also, the Australian Securities and Investment Commission (ASIC) is the national regulator for consumer credit.
Other things to consider:
Due to the fact that purchasing a car is one of the most expensive things, it is important that you are sure about what you really want to buy. The Motor Dealers and Repairers Act 2013 allows for a one day cooling-off period for motor cars bought through a linked credit arrangement.
You are under a linked credit arrangement if you purchase a car from a dealership who arranges for your car loan or gave you a loan application form as a referral agent of another credit provider.
As soon as you sign a contract with a dealer, the cooling-off period starts and it will end at 5pm of the next day.
If you decide not to purchase the car the next day, you need to give a signed, written notice to the dealer and pay $250 or 2% of the price, whichever amount is lower.
You may be tempted to extend or waive the cooling-off period but it is recommended that you stick to the original one day cooling-off period for your own protection.
Contracts and Deposits
Be wary of anything you sign when buying a car. The only thing you would usually need to sign in this scenario is a sale contract. It may also be a loan form but whatever paper handed to you, make sure you read and understand it before you sign.
Any contract is legally enforceable. Do not be pressured to sign anything that you do not fully understand. If you are not sure, do not sign.
The contract must indicate that “completing a purchase is conditional on you obtaining the loan.” This is important, you should make sure that if you cannot get a loan after several tries, then, your deposit should be returned to you. Make sure all these clauses are in the contract.
At the same time, if you hand money for deposit, get a receipt for it.
Remember to be smart when purchasing anything especially when it involves a lot of money. Think about it very well and be honest about your finances.
Know that the Australian Consumer Law protects consumers like you from unfair terms in a contract. If after attempting to resolve an unfair contract term, the dealer still refuses to change it, you have the right to lodge an official complaint with Fair Trading.