Navigating car finance | Blog.CommBank

So you?ve found the car of your dreams at a car dealership that also offers finance at an incredibly low rate ? it?s tempting, but how do you know if this is your best finance option?

It?s not your only option. A bank car loan is another popular choice to finance the purchase of a new car. But to find out the true cost of any car finance offer, you need to dig a little deeper to know exactly what you are getting before you sign on the dotted line.

So how does dealer finance compare to a bank car loan?

Ask the right questions

With dealer finance, it?s vital to find out more than just the interest rate. To do that, you need to know the questions to ask before you even step foot on the car lot.

1) Are there any additional fees and charges? Dealer finance often includes a dealer origination fee, establishment fee, security registration fee and exit fee, which you may not be aware of. Don?t be blindsided by the low interest rate. It pays to ask about extra fees, and to compare all fees and charges with those of other loans.

2)?Is there a balloon payment at the end of the loan? There may be a large sum to pay at the end of the loan, making your regular repayments cheaper.

3)?Is there any room to negotiate on the price of the car? You may not always be able to negotiate the price of the car with dealer finance. Always find out the cash price for the car, because there may be significant savings.

4)?Is dealer finance available on all vehicles? Often dealer finance is restricted to specific vehicle models or years, new vehicles or cars with particular features.

Bank car loan advantages

It?s often a wise decision to research and arrange your car finance before going to the dealership. A popular option is a bank car loan. So what does a bank car loan offer?

- You can find out upfront how much you can borrow and what your repayments will be with our car loan calculator. You can also work out the fees and charges.

- ?You?ll be able to shop with confidence with a pre-approved car loan. You?ll know exactly how much you can afford to pay for a car and it?s valid for 30 days.

- ?A pre-approved car loan means you?ll have the money ready to go if you spot a great deal, and you may even be able to negotiate a better cash price or free or discounted optional extras.

- ?We have secured loans for all new vehicles and private sales of vehicles under five years old, and unsecured loans for all used vehicles. Our car loan comparison can help you decide the car loan that?s right for you.

For more information on CommBank car loans visit http://www.commbank.com.au/personal/personal-loans/buying-a-car/new-or-used-car-personal-loan.html

Important information: The advice contained in this article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances. Commonwealth Bank of Australia ABN 48 123 123 124.

Source: http://blog.commbank.com.au/your-money/navigating-car-finance/?utm_source=rss&utm_medium=rss&utm_campaign=navigating-car-finance

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