How To Pay Off Your Vehicle Finance Fast!

A lot goes into buying a car in NZ—from determining your budget, deciding on the car’s make or model, to seeking auto financing. We can all agree that excitement comes after loan approval and disbursement; you can now own and drive your dream car while enjoying the convenience.

But here’s the problem: some car owners get overwhelmed financially, making it hard to comply with scheduled NZ vehicle finance contributions. It happens when you have unfavourable financing terms or lack a proper plan to pay off your vehicle finance fast. Here’s why you should be prompt in payments and the best techniques to leverage.

Why Pay Off Your Car Loan Faster?

The moment you drive off your vehicle from the dealer’s showroom, it loses approximately 20% of its value. While the depreciation rate depends on the vehicle’s type, mileage, market conditions, vehicle status, and so on, every vehicle will have depreciated significantly in 3 to 5 years.

Now, imagine taking a car loan NZ with a repayment term of 60 – 72 months? It means, at some point, you might be paying the lender more than your vehicle’s value. Paying the debt faster allows you to enjoy owning a car before losing a significant part of its value. At Kiwi Car Loans, we can help you finance a car in NZ without any financial burden.

6 Proven Techniques to Pay off Your Motor Vehicle Finance Fast

Regardless of your auto loan amount, you can pay off your auto finance quicker, have financial freedom, and boost your credit score.  All you need is dedication, discipline, and actionable techniques. Here’s how you do it:

Shorten Your Loan Payment Term

Most auto loan repayment terms range from 24 to 72 months. While it’s tempting to settle for a longer loan term owing to the smaller monthly repayments, it won’t help pay off your car loan faster—but reducing the loan term to a few months will. It’s because you’ll pay sizable monthly installments.

Shorter terms also come with lower interest rates, which means reduced overall loan amount and more savings. Check out our Kiwi Car Loans car payment calculator for flexible loan repayments.

Make Extra Payments

You don’t have to stick to the monthly payment schedule. Make extra payments if the lender allows for such arrangements. Instead of spending your bonuses or incentives elsewhere, direct them towards your weekly, monthly, or yearly car loan repayments. You’ll complete paying the debt faster than anticipated.

Expand Your Income Sources

Don’t confine yourself to the financial position you were in when applying for vehicle finance. Be open-minded and think of ways to broaden your earning capabilities. For instance, you can get a part-time job. Making more money will help you channel a considerable amount towards paying your auto loan NZ.

Consider Refinancing

Refinancing works to your advantage if you’ve been paying off your vehicle loan on time. But first, discuss with your lender to find out whether they allow for refinancing. Opt for this option only if it’ll help lower your monthly payments and accelerate the payoff date. Otherwise, you’ll only lower the monthly payoff, lengthen the repayment term and end up paying almost the same principle and interest.

Map Your Expenditures and Budget

Evaluate your financial goals and budget your income. Prioritize paying off big expenditures like your car loan. That means you’ll have to hold on to other things until you clear your car debt. Make sure you come up with a budget that best suits your lifestyle.

Resale Your Car for A Cheaper Ride 

If it makes any financial sense, you can sell your car, use the money to clear the loan, and buy a cheaper model with the balance. Sometimes it’s not all about the vehicle’s worth but your financial stability. Save yourself the financial dilemma by disposing of that luxurious car and buy a cheaper option.

Kiwi Car Loans Positions You for Affordable Auto Financing

With the current economic challenges, buying a car you can finance easily through a trustworthy lender that meets your specifications is the way to go. Ready to avoid longer debts that may adversely impact your financial goals and lifestyle? At Kiwi Car Loans, we’re the smart car finance lender you’ve been looking for. We have a pool of finance options that meet your budget and work closely with New Zealand’s most affordable and credible lenders.