Before we start, we have some great tools that you may find useful in your “getting financed” journey, you can skip straight to them here:
We’ve been in the car finance game for over 20 years, and we’ve seen it all! We’ve helped thousands of customers secure their dream car but we’ve also seen common mistakes being repeated time and time again.
Some of these mistakes could cost you your car deal, your long term finances or your closest relationships!
That’s why we’ve summarised these 4 tips in order for you to:
Knowing your budget requires research, planning, and a bit of honesty with yourself.
You can become blinded by the first car you see with fresh tyres, clean floor-mats and a leather trim. But don’t be completely fooled by the cosmetics!
Compare with similar aged cars:
Here, it’s important to listen to your brain and not the heart, and you can confidently land on a price that is reasonable with the market.
We’re not trying to school you on budgeting, but you want to ensure you’ve thought of absolutely everything when calculating your expenses. Obviously this includes your major expenses such as rent/mortgage, fuel and food, but what about the non-regular bills and small things that add up?
This could include:
We’ve made this part really easy!
Simply use our car loan and interest calculator below.
Based on your safety net, you can use this figure in the calculator to reverse engineer your total borrowing capacity depending on the interest rate.
For example, if you know you want to keep repayments to under $130 per week, you’ll most likely be looking at a car loan of roughly $35,000 over a 7 year loan at 6.4% interest.
Avoid setting your sights on a more expensive vehicle, and expecting it to meet lower repayments.
Alternatively, start with the price of the car you want, and use the calculator to see the final repayments. Compare this figure with your safety net number.
Getting on the front foot with your credit score can help you in the long run, ensuring you can:
Sometimes, making too many applications in a small period of time can cause providers to become suspicious, so taking some time away from these applications can help you in the long run, while it may be frustrating to begin with.
Equifax is the only credit reporting body that lenders will use to view your credit score. Don’t get confused with Experian.
Using free apps, such as CreditSavvy, Credit Simple and ClearScore will provide you with a pulse check of your credit status, but they don’t use Equifax, and are therefore not 100% accurate, often leaving people feeling confused, frustrated and deflated when being declined on finance.
Equifax allows you to order and access your score for free once every 3 months, or if you have been declined by a credit provider in the last 90 days.
If you’ve accessed it once already in the past 3 months, you can either pay for a new one or give us a call and we can perform a soft check for you.
If you’ve found that your credit score needs some love, or if you feel like your budget could do with tightening up regardless, we’ve built this epic budget spreadsheet to help you reign in your spending and get your finances back on track.
Fill in the form below and you’ll receive an email with a link to the budget tool.
The spreadsheet takes into account your expenses that occur at different frequencies.
There’s also some placeholders in there for things you may have forgotten!
Getting pre-approval for a car loan is considered best practice when in the market to purchase.
This will benefit you in the following ways:
You’ll have leverage with your bargaining power – knowing your absolute maximum amount, while also being in a “ready-to-purchase” state, will give you more leverage with the seller of the vehicle.
You’ll shop with confidence – knowing you’re pre-approved will give you confidence to shop, but also the confidence to say “no” to any car dealer pressure. Having your finances pre-approved means you don’t need to rely on the dealership to get you approved and forming a contractual bond when there may be better options out there.
You’ll get the best car loan rate possible when taking the time to get pre-approved. Taking this time upfront will give you a chance to review the market and speak to different brokers to get the best rate for you. Leaving it until the last minute in a dealership can result in making a purchase in a highly emotional state within a high-sales-pressure environment, usually due to the excitement of seeing and test driving a car. Quick and emotional decisions can result in higher fees and rates, and negatively affect your finances in the long run.
You’ll always pay a fee of some sort when getting finance. Either you’ll pay higher interest over a longer period of time, or you’ll pay a “finders fee”.
Here at Loans Unlimited, we charge a “finders fee” because we are unbiased and do not make money on charging you a higher rate.
The “finders fee” is exactly how it sounds. We find you the best rate we can which will end up being better for you in the long run than a higher rate. The fee can also be paid off over the loan term.
For us to find you the best rate and help you secure your car quickly, we will usually require documents that help us in your case.
Finance lenders will place you in a category for finance. It is our job to get you into the next category to secure cheaper rates.
As such, we’ll need to ask for documents such as payslips, bank statements and ID so that we can build your profile. Work with us here in either having documents ready, or providing them quickly when we start the process.
Likewise, use us to your advantage in scouting the market and acting fast when you supply your documents.
By knowing your budget, using loan calculators wisely, managing your credit score, and securing pre-approval, you can navigate the car finance process smoothly and avoid common pitfalls.
At Loans Unlimited, we’re dedicated to helping you secure the best car loan rates and making the journey to owning your dream car as stress-free and financially sound as possible. Feel free to use the tools in this guide, or get in touch with our team.
Loans Unlimited are Perth and Western Australia’s premier loan and finance brokers. We have helped thousands move towards their financial goals by offering lower rates and faster approvals when it matters. Financial services are provided by Total Biz Pty Ltd T/A Loans Unlimited ABN 78 624 937 882 ACL 506875.
* The comparison rate shown is for a secured loan amount of $30,000 over a term of 5 years based on monthly repayments. Warning: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
Any calculations or estimations do not constitute an offer of credit or a formal credit quote and is only a calculation of what you may be able to achieve based on the information you have entered. It does not take into account suitable product features or loan product types. Rates + repayments shown are based on user inputted data. All applications for credit must be verified prior to the formal assessment process. All applications for credit approval are subject to lender credit approval. Approval is not guaranteed.
