3 ways you can reduce the interest on your car loan.

Aside from buying a house, car purchases are among the most expensive transactions most of us will ever make. Accordingly, it's very common to take out a car loan in order to pay for that new set of wheels you've got your eye on. However, what a lot of people don't consider is what they could be doing to make their car loan work for them in a better way - primarily by securing a better interest rate.

Over the repayment period, even a slightly lower rate can have a significant impact on how much interest you'll have to pay your lender, so it's certainly worth your while investigating the various ways to secure a better deal. To make this a bit easier for you, the team here at Beyond Bank has compiled three of the simplest ways to get a better interest rate.

1. Buy a new car

You might think that the best way to save money on a car purchase is to go for a cheaper, secondhand option. While this might save you in the short-term, you may be surprised to learn that newer cars often come with significantly lower interest rates than older ones.

One of the major reasons for this is that a newer car will hold its resale value far better than a secondhand one. Particularly with very old cars, resale value is often something of an unknown quantity, and lenders hedge their bets against the vehicle breaking down by increasing that amount of interest that you'll need to pay.

The solution? Buy yourself a brand new car! Yes, you may have to save for slightly longer, or spend more time paying off your loan, but in the long run, thanks to a potentially lower interest rate, more of your money can be going towards the car itself. Besides, who doesn't want an excuse to splurge?

2. Do your research

Another great way to save money with lower interest rates is simply to do a little bit of research. It can be tempting to simply go with the standard car loan offered by your car dealer, but often this won't be the best deal you could get.

Spending a little bit of time looking at the options and comparing interest rates can save you hundreds or even thousands over the life of your loan, and that's before looking into the special deals or discounts you may be eligible for from some providers. For example, here at Beyond Bank, we offer special discounts on interest rates and fees to our pinnacle +plus and life members.

3. Have a good credit history

Yes, paying bills on time, staying up to date with utility providers and credit cards could potentially play an integral part in the type of loan for which you are eligible.

Minimise your debt, including credit cards, stay in the same job and residence or build up your savings for a bigger deposit are factors that can give you the final tick for the car loan you are after.

Find out about credit ratings or scores and make sure everything is in order for you before applying for a car loan.

For more information on car loans, contact Beyond Bank today.