How to choose a car loan that’s right for your family
What is your family like? Every family – from multiple kids to single parents, and those just starting out to families with kids off to university – have something in common.
They’ve got to get everyone where they need to go! There’s no doubt about it, being a parent keeps you on your toes, so there’s not always time to ask yourself if your current car loan is working for you, let alone sit down and review the specifics.
But that’s why we’re here! Check out our car loan guide on how to pick the right option for you. We’re going to break down the various types of loans and give you some pointers on how to select the option that best suits your family’s financial situation and lifestyle.
Begin by assessing your lifestyle
Let’s start easy. Deciding on the right car loan doesn’t begin with breaking down loan terms or budgeting, it’s just about figuring out the type of car you’re going to need! Ask yourself what your family needs – is it a heavy duty people mover for your growing family? Or a cosy car for zipping around town on the weekends?
Make a list of what you absolutely need in a car so you can narrow down your options once it comes time to shop.
Create a budget
Now it’s time to make a budget so you can better assess the type of loan you’ll be after. Every budget begins by evaluating your annual income, as well as your regular expenses such as mortgage or rent, monthly utilities and bills, and the amount you spend on things like groceries. Essentially, you need an idea of how much you absolutely need to pay each month so you can make these payments without sacrifice once you buy the car.
To help you calculate these basic costs, use our handy loan repayment calculator – you can easily toggle through the settings until you find the loan repayment plan that works best for you.
Assessing loan options
There are a few different loan options that you need to sort through, so we’ve broken them down to make it easy to select the one that fits in with your family and lifestyle:
- New car loans: This loan option requires the vehicle to be brand new (up to three years old) and is secured by the value of the car.
- Secured car loans: This type of loan requires you to offer an asset as collateral for the loan in case you are not able to pay. If you are unable to make repayments, the credit provider can take back and sell your asset to get their money.
- Unsecured car loans: This type of loan does not require offering up an asset for security, and as a result can be more challenging to get as you now have to convince a lender that your credit and financial standing are strong enough for them to trust you. Additionally, this option typically has higher interest rates to account for the higher risk in lending.
For more information or help selecting that’s right for your family, contact the team here at Beyond Bank and let’s chat!