What To Consider When Applying For A Car Loan

Need a new car, but aren’t sure how you’re going to get the funds?

You’re not alone.

Thousands of Australians would like to upgrade their cars but unfortunately find themselves held back due to tied up income. This can become very problematic for small business owners or commuters who need a car to get to and/or perform their job.

Of course, there is a solution to this problem... car loans! But what’s involved in getting a car loan? Will you even get approved?

Never fear! Let’s take you through the various considerations you need to make when applying for a car loan to ensure you not only get a new car, but bang for your buck.

Compare and shop around

There are thousands of finance providers across Australia who will provide you with a car loan - regardless of your credit history. But which is the best for you?

Enlisting the help of a finance provider is one of the best ways you can ensure you’re choosing the right car loan for you. Whether you’re buying personally, for a your small business or even a multi million dollar enterprise, receiving help from professionals ‘in the know’ is one of the best ways you can protect yourself.

Consider this - Usain Bolt is an incredible sprinter. But to become the elite sportsman he is, he’s had the help of trainers, nutritionists, physiotherapists etc. By enlisting the help of professionals who know more than he does about niche areas in his industry, Usain has improved his overall performance and success.

Applying for loans is no different! Chances are you don’t spend the day scouring the finance market, looking for great loan rates and opportunities. So speak to a professional team who scour the industry day in, day out, and make sure you snag yourself a great deal!

Get a better rate with a business car loan

It’s not always the case, but when securing a car loan you’ll often find yourself snagging a better deal if you apply through your business.

There are two main reasons for this. The first; if you finance a car that is solely used for business purposes you are entitled for a tax deduction for the entire value of the vehicle. That’s one big saving! Even if you apply for a loan and claim the car as an asset of your business, you’ll still be able to secure a pretty great tax deduction. Secondly, personal loans will usually incur a higher interest rate and/or be offered smaller loan amounts.

If you’re a business owner make sure you ask your finance provider to fully investigate what opportunities may be available to you in securing a business car loan!

Consider a low doc or no doc car loan

As the name suggests, no doc car loans and low doc car loans equal a whole lot less red tape! If you’re someone who loses tax returns, bank statements and the like, you’re not alone - which is why they’ve become such a popular solution for anyone applying for car finance.

By limiting the amount of hoops you need to jump through in order to secure finance, low or no doc car loans are already of enormous benefit. However they add even more to the mix by providing ‘extras’ like:

• GST and other tax breaks
• Easy repayment structures
• Loan terms lasting up to 7 years
• Balloon payment option
• Fixed interest rates

What’s not to like?!

Check Your Credit History

‘Credit history’ has almost become a swear word, especially if you’re trying to make a personal purchase or own a small business. But most people don’t even know what the term refers to, or how it can actually help you get a loan.

Credit history refers to your debt and repayment history. Have you ever taken out a loan before? If so, did you make your repayments on time? This is documented information available to loan providers to reference when deciding to provide an applicant with a car loan.

If you have made your repayments on time and have had little to no ‘hiccups’ along the way, your credit history will be incredibly helpful next time you apply for a loan. By demonstrating you are responsible and dedicated to making your repayments, financiers are more likely to approve your car loan. But, if you don’t yet have credit history (or perhaps have made a few silly mistakes in the past) you may need to explore more creative loan options...  

No matter your situation, when applying for a car loan there are always multiple options and solutions for you to consider. If you feel lost or confused, your best move forward is to speak to a finance specialist who knows the industry backwards and who can guide you through the process.

If you’d like to speak to the AAA Finance team, call us (07) 5493 1222 or email enquire@aaafinance.com.au.