4 common mistakes when choosing a car loan
Buying a car for the first time? Understanding the ins and outs of the purchasing process can be tricky. One of the points of this process that can stump people up the most is the dirty little financial. That’s right, we’re talking about the car loan.
Picking the right car loan begins with educating yourself on what is right for your financial situation. To help guide you through this process, we’ll lay out what you need to avoid as well as what to look for in a loan.
Mistake 1: Not knowing credit score
Don’t go in blind! Your credit score is going to determine your eligibility for a car loan, so you should know what to expect before going in. Your credit history shows the lender how good you are at paying on time. A good history will get you a lower interest rate, which will allow you to spend a little more on the car itself, should you want to.
Mistake 2: Thinking in the long term
Many go in thinking they need to focus their payment plan on what they can afford month to month – but be careful thinking like this. It might sound appealing to pay less money each month over a long time, however, you could end up spending thousands extra on top of the overall car price as interest increases over time. This is why you should opt for a short term loan.
Mistake 3: Not considering hidden fees
Ensure you’re also aware of the less obvious fees such as maintenance and insurance costs. Everything from the amount of gas to routine oil changes will need to be worked into your budget. This doesn’t need to be a painstaking audit either, you can easily review your budget with a car loan calculator.
Mistake 4: Rushing into the deal
It’s totally normal to feel excited about getting a new car, and therefore eager about getting the auto financing process over with as quickly as possible. But we’re here to tell you to slow it down. Of course, this is a big financial decision, so you’ll want to ensure you’re picking a car that fits your lifestyle. But it’s important that you fully understand the deal you’re getting yourself into before you sign on the dotted line.
At Beyond Bank Australia, we want to help you sort through the loan process and get behind the wheel of your new ride ASAP! Play around with our car loan calculator, see if you need a loan pre-approval and contact our team to help guide you through the process today.