Choosing the right car loan can be tricky to navigate. From interest rates and fees to selecting the perfect loan term, there's a lot to think about.
So no matter if you opt to borrow from a traditional bank or an online lender, there are a bunch of dos and don'ts when it comes to getting a car loan that you should know about, to avoid being taken for a ride.
Read on to find out Mozo’s expert car loan tips and compare top car loan deals on offer right now…
Car loan dos:
Compare car loan interest rates: Interest rates vary hugely from lender to lender, so be sure to compare rates from a range of lenders to avoid getting stung. Some lenders offer tiered rates that reward customers for having a good credit rating.
Look beyond the big banks: Right now, the lowest car loan rates in the Mozo database stars with a '3', but the big banks aren't advertising rates below 6%. Take the time to weigh up all your options to ensure the product you choose is suitable for you.
Give yourself flexibility: It’s always a good idea to choose a loan that allows you to make free extra repayments whenever you can, should you have some extra cash. Some loans charge penalties for early repayment.
Car loan don’ts:
Beware of introductory car loan rates: Some car loans advertise a low intro rate, but keep in mind that once the intro period is over your interest rate will increase, and so will your interest repayments.
Watch out for multiple fees: An application fee, a monthly charge and an early repayment penalty may seem like small costs separately, but could end up costing you thousands. For example, a $10 monthly fee adds up to $600 over a 5-year loan.
Remember, the longer the loan the more interest you pay: If it's feasible for you, opt for a shorter loan term. While your regular repayments may be higher it’ll save you in the long run as it means you’ll fork out less in interest.